When it comes to investing, parking your money in different instruments is advisable, be it high-risk instruments like Stocks and Commodities or low or negligible-risk instruments like a Fixed Deposit. By creating an FD, an investor can easily pave the way for their retirement plans or simply be a little more secure about saving money for a rainy day or during emergencies.
A fixed deposit or a term deposit is an investment product designed by banks that offers account holders to deposit a specific amount of money with the bank.
The amount is held with the bank for a specified term or time period. After the completion of the term, the depositor is rewarded with a profit along with the original principal amount that he/she deposited at the beginning of the term.
Check out some of the Features of Fixed Deposits:
- It offers scope for individuals to earn a rate of interest that is higher than usual (more than saving account interest rates) by investing their extra money. The stipulated returns on an FD can easily be calculated using a calculator, like the Bajaj FD calculator, for example.
- Fixed or term deposits are a ‘one-time’ deposit
- Individuals are required to open a separate fixed deposit account each time they wish to deposit money under a fixed deposit scheme
- The term period may range from 15 days to 10 years, depending upon the depositors’ choice
- The rate of interest that the bank offers may differ from one bank to another, the rate also depends upon the principal amount that the depositors invest
- Individuals cannot usually withdraw money from a fixed deposit account before the maturity date, however, in case of an emergency, the bank allows the individual to close the account before the date of maturity and deducts 1% from the interest that has been calculated till the date of closing the account
Interest Rates of Top Banks and Financial Institutions in India
|Financial Institution||For Non-Senior Citizens (p.a.)||For Senior Citizens (p.a.)|
|Bajaj Finance FD||5.70% to 7.20%||5.94% to 7.45%|
|HDFC Bank FD||2.50% to 5.50%||3.00% to 6.25%|
|SBI Bank FD||2.90% to 5.40%||3.40% to 6.20%|
|Bank of India FD||3.25% to 5.30%||3.75% to 5.80%|
|BOB Bank FD||2.80% to 5.25%||3.30% to 6.25%|
|ICICI Bank FD||2.50% to 5.50%||3.00% to 6.30%|
|Axis Bank FD||2.50% to 5.75%||2.50% to 6.50%|
|IDBI Bank FD||2.70% to 5.25%||3.20% to 5.75%|
|LIC Housing Finance FD||5.25% to 5.75%||5.75% to 6.25%|
|Kotak Bank FD||2.50% to 5.41%||3.00% to 5.93%|
Benefits of Investing in Fixed Deposit
- Helps you save a substantial amount of money over a long period of time
- Gives investors an opportunity to earn a high rate of interest on their investment
- It is easier to get loans for an account holder with fixed deposits in the bank
- Investors receive a lump sum at the time of maturity
How to Calculate Interest Rates using an FD calculator?
If you want to understand how much returns you can earn from a Fixed Deposit, then using an FD calculator is just the thing for you! Various banks and lending institutions have their own FD return calculator, which can help you decide how much to invest in an FD and streamline finances easily. Here’s how you can use the Bajaj FD calculator to calculate your returns:
- Visit their website and find the Bajaj FD calculator under Investments > Fixed Deposits
- Once the calculator opens, select your customer type.
- Next, select the type of Fixed Deposit you wish to start, i.e., non-cumulative or cumulative
- Now enter the amount that you wish to invest in the Fixed Deposit
- Select the investment tenure you prefer and hit the button
The calculator will now show you the interest you can earn for your invested income over the stipulated tenure and interest rates. You can then change the rate of interest and tenure to compare your earnings from the Fixed Deposit. The calculator helps investors understand easily by showing them a breakdown of the total maturity amount and how much interest they can earn in a simple and easy-to-understand pie chart visual.
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