Fixed deposit is one of the most popular investment options in India. Considering the fact that an FD is one of the few options with relatively lower investment risk and one that provides guaranteed returns, no wonder most individuals tend to prefer investing in it. There are two different types of fixed deposits that you can choose to invest in - cumulative FD and non-cumulative FD.
If you’re planning on investing in either of these fixed deposits, it is important that you know what the interest component on the FD is beforehand. This will help you make a more informed investment decision. But then, how do you determine the interest and the maturity amount on a fixed deposit? Here’s where an FD interest calculator comes into the picture. Continue reading to find out more about this unique tool.
An FD calculator is a nifty online tool that allows you to quickly compute the interest and the maturity amount that you’re likely to receive on a fixed deposit. All that you need to do is enter a few details of the fixed deposit. The tool will instantly display the interest and maturity amount payable to you.
You can find many such calculators online. Motilal Oswal also offers an FD interest rate calculator to help you determine the interest and the maturity amount on your fixed deposit investments.
Firstly, start by entering details of the fixed deposit such as the amount of investment, the rate of interest on the FD, and the total tenure of the investment. Then, select the type of FD that you wish to invest in and the frequency of interest payout. Once you enter all the following details, the calculator will instantly display the amount of interest and the maturity amount that you’re likely to receive.
Although you can calculate the interest component and the maturity amount on an FD manually, doing so can pose certain risks. Errors or mistakes may inadvertently creep in during manual calculation, which can end up derailing the entire result. Also, calculating manually can take quite a bit of time as well.
However, with an FD interest rates calculator, you don’t have to endure all of that. The tool only takes a few seconds to calculate both the interest and maturity amount components of an FD. And since the tool is automated, the results that you get will be accurate and free from errors or mistakes of any kind.
Yes. In a non-cumulative FD, the interest on the deposit is paid out to you periodically. You can choose to receive the interest on such fixed deposits either on a monthly, quarterly, semi annual, or annual basis. At maturity, only the principal amount on the fixed deposit is returned to you.
In a cumulative FD, on the other hand, the interest continues to get compounded annually till the end of the selected tenure. At maturity, the entire principal along with the accumulated interest up until that point is paid out to you.
As you can see, using an FD interest calculator is the easiest way to determine the interest and the final maturity amount payable to you. It takes only a few seconds and is super accurate. That said, if you’re looking to invest in other options with a much higher return generating potential, then investing in the stock market is something that you can look into.
But before you go ahead with investing in stocks, make sure to open a demat account first. You can get in touch with Motilal Oswal to open one for yourself within just a few minutes.
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