A fixed deposit is an investment tool that helps grow your savings at a good rate. It is also a reliable instrument, as its interest rates do not change with market fluctuations. The fixed rate of interest and the fixed tenor make it easy for you to evaluate the interest before investing.
For making it easier for those who are not into manual calculations, many financiers provide an FD interest calculator on their website. To know how to evaluate the interest gains of an FD, you will have to understand the below steps thoroughly:
- Step 1: Find the website of a financier that offers a lucrative FD scheme according to you. On this website, you will need to search for the FD calculator first.
- Step 2: After finding this online tool, check if customer categories are specified. If yes, choose the customer category that best describes you. For instance, if your age is above 60, and there is a category for senior citizens, you should select it before proceeding further.
- Step 3: Now, you can enter the deposit amount and tenor that you are comfortable with. After that, choose one between the FD types, i.e. cumulative or non-cumulative FD.
- Step 4: Once you are happy with your choices and entries, you can calculate the interest gains. The calculator will display the returns and interest gains automatically as you hit the ‘Calculate’ option. If you are not satisfied with the results, you can experiment by changing the tenor, amount, and other values.
To get maximum returns from an FD plan, you must see that the FD interest rate is high enough. Some of the ways to improve your returns through an FD are given below:
Invest in Company FDs
Investing in a bank FD can be considered if the interest rate is high enough. Otherwise, it would be smarter to invest in a company FD as most of them offer much higher interest rates.
Bajaj Finance FD is a fine example of this as it is offering an interest rate as high as 7.25%. This FD rate is one of India’s highest FD rates, which means that you will earn substantial returns on maturity if you invest in its FD plans.
Think of reinvesting FDs
An FD gives maximum return if you invest in its cumulative FD type of longer tenor. This increases the frequency of compounding. As the interest gains will not be paid out periodically, the principal will add it during the consequent interest calculation cycles. Your investment will grow at a faster rate. However, if you fail to choose a longer tenor, you can compensate the loss by reinvesting the FD returns upon maturity.
Bajaj Finance gives you the opportunity of selecting the auto-renewal option while filling the online FD form. Also, you get a 0.10% better FD rate on choosing the online method of investment.
Laddering deposits
Laddering deposits is recommended if you do not want to rely on one FD plan. However, it is also a smart decision to benefit from the additional liquidity points that you would get after selecting varying tenors for your deposits.
Bajaj Finance’s multi-deposit facility lets you invest in several FD plans simultaneously. You can also select different tenor and FD types for each of your deposits. This provides you with multiple liquidity points, and therefore, you need not break your FD during a crunch situation.
Its FD plans are stable as they have got good ratings from credit rating organizations like CRISIL and ICRA. Moreover, it also offers an additional FD rate to senior citizens and lets you choose a flexible tenor from 12 to 60 months depending upon your requirements. Due to these features and an attractive rate of interest, you can certainly think of investing in its FD plans.
It is possible to predict an FD’s returns in advance as its interest rate remains fixed throughout the tenor. If you are not into manual calculations, you can utilize the FD calculator that many financiers provide on their portal.
As the FD rate plays a major role in determining your interest gains, you must invest in a high-paying company FD like Bajaj Finance FD. This is because it offers a higher interest rate and provides many other features like multi-deposit facilities, the higher interest rate to senior citizens, auto-renewal option, etc. Its flexible tenor range and stability make it one of the most coveted FD schemes of recent times.