Fixed Deposits are a boon for people with low-risk appetite. At times, we may not have exact clarity on how much to invest each month to achieve our financial goals or even meeting monthly expenses. Knowing how much you will need at a designated period of time is an important aspect of financial planning.
Hence to be an aware investor, one must know how to calculate basic interest rates on FD. Let us look at various methods to calculate the interest rate on fixed deposits. You can do the calculation manually using compound interest tables, or you can utilize fixed deposit calculators available online.
Bajaj Finance offers free online FD calculator where you can adjust the parameters as per your requirement and get the maturity amount you can expect to receive. With a simple and user-friendly interface, anyone can use this at their convenience.
How to use the Bajaj Finance FD Calculator?
1) Choose the customer category that you fall into. This is important because the interest rate will change accordingly. Interest rates vary depending upon whether you are a new customer, an existing customer or a senior citizen. Senior citizens can avail an additional 0.35% interest rate on Bajaj Finance FDs. Existing customers going for renewals also receive an additional interest rate of 0.25%,
2) Then choose from the cumulative or non-cumulative option of fixed deposit,
3) Finally, enter the principal amount with which you intend to open the fixed deposit.
These steps will lead the calculator to automatically show the interest rate and maturity amount. Trying out various tenors and principal amounts will enable you to gain insight into the working of calculation of fixed deposit interests as follows –
1) Changes of interest rates by tenor – when you adjust the tenors, the interest rate changes. You will realize that as the tenor increases the interest rates also increase. Varying interest rates on different amounts will give you your desired maturity amount. You can then decide upon the right amount that can meet your needs.
2) The range of tenors– Bajaj Finance FD has tenors ranging from 12 months to 60 months. You can try various combinations of tenors to understand how it affects your maturity amount. Also, depending upon your time horizon and desired maturity amount, you can decide on the principal. Thus, adjusting tenor is a good way to understand the differences.
3) Optimum principal – To achieve a desired maturity amount, with a specific tenor, you need to know how much money is required to be invested. Online FD calculator will instantly tell you various principal amounts you can use to achieve the desired lumpsum over different tenors. You can understand the interest rate available for a specific tenor.
4) The maturity of principal – If you have a pre-decided principal amount to invest and a desired maturity amount, you can see how much of tenor will be required to achieve that. You can see the maturity amount after N number of years.
Online FD calculator from Bajaj Finance is quick, easy to use, and very intuitive. Creating a portfolio of fixed deposits becomes very easy once you know the duration of tenor you need for each deposit at a specified rate of interest. Bajaj Finance offers the highest interest rate in the industry- at 8.75%. The maximum interest you can earn is 9.1% as a senior citizen.
While manual compounding is difficult to do on a regular basis, you can save time by using this facility and focusing on various options to choose from. Also, choosing from cumulative and non-cumulative options can support your decisions as the interest rates will vary slightly along with the maturity amounts. Depending upon your requirements for a periodic payout, you can choose to go for a non-cumulative fixed deposit or a non-cumulative one.
A non-cumulative option is a powerful tool to enhance the value of your fixed income portfolio. Stable and high returns are possible with company fixed deposits like Bajaj Finance which also offer the assurance of high credit ratings from CRISIL and ICRA.