A Fixed Deposit (FD) is a tax saving investment tool with guaranteed returns. Since it involves a lump sum amount for a deposit, every investor should check the yields, interest rates, and credibility of the bank or financial platform before investing.
What are the benefits of investing in a Fixed deposit account or FD?
How to determine the best FD plan?
Avoid opting for lenders who provide low-interest rates. Choose platforms that offer the best FD rates, at least 7%, such as PNB Housing Ltd (FD rates up to 8.7%).
FD involves putting in a lump sum amount. Hence ensure the reliability of the lender through ratings provided by agencies like CRISIL and ICRA.
Investors should choose a plan based on whether they want periodic returns or interest at maturity. Non-cumulative option gives investor income based on the payment mode selected. Cumulative FD compound interest and offer them to the investor at maturity. However, the cumulative option gives investors a higher interest compared to the non-cumulative option
Application procedure varies from lender to lender. Hence investors are advised to choose financial platforms that have a simple documentation process for a hassle-free investment.
How to calculate FD interest and maturity amount?
The interest rates on Fixed Deposit (FD) are calculated based on interests and frequency of payouts.
FD amount at maturity calculation formula is: A = P (1 + r/4/100) ^ (4*n) and A = P (1 + r/25)4n.
Where A – amount at maturity
P- principal
R- rate of interest
n- compounded interest rate frequency
Using FD calculator
FD calculators are great tools for calculating returns and plan investments. The inputs required are initial investment amount, tenure, and rate of interest to the FD calculator to receive the amount at maturity.
Benefits of using FD calculator are :
Factors affecting FD deposit rates
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