Articles

What Are Fixed And Recurring Deposit Calculators?

by Shashank Bhaskar Finance Adviser

Investing is an act of adding value to your idle funds. You get several mediums to do the same. Be it Bonds, Equities, Stocks, Provident Funds, or property. All offer many benefits and flexibility. Among the options, Bank Deposits are the most sort-after. The main reason is the safety and assurance they offer. 

If you plan to invest in them, you get two categories to choose from – Fixed and Recurring Deposit Account. The former requires you to invest in lumpsum while the latter extends instalment convenience. But before depositing in either, it helps to calculate the interest. As manual computation is complex, banks have interest calculators on their websites. These are accessible tools that give you an accurate return estimation in simple steps. 

Principal amount: This depends on your convenience and investment goals. For FD, you need a lump sum amount. The minimum deposit allowed ranges between Rs. 5,000 to Rs.10,000. There is no upper limit. As for a Recurring Account, you make regular instalments. The minimum deposit is Rs. 100 or Rs. 500 without a cap. The funds you invest remain locked in until maturity barring pre-withdrawals. 

Interest rate: Here, adjust the toggle based on your preferred interest. Note that the returns get influenced by other variables. However, the normal range for Fixed Deposit interest rates is 4% to 7.5%. As for RD, the interest gets compounded quarterly. This gets affected by the change in the monthly deposit amount. Hence, the interest calculation is a bit complex. It is best to enter an estimation and see how other variables react. 

Deposit term: This is an important part of determining your gains. A longer tenure gives higher returns and vice versa. The duration for a Fixed Deposit is between seven days to 10 years. On the other hand, an RD comes with a period of six months to 10 years. Hence, you get sufficient flexibility in both deposit types. Select the relevant term based on your short-term or long-term investment goals.  

Computation: These are the essential elements to input in the Fixed and Recurring Deposit Calculator. Once done, the tool displays the results within minutes. It includes a breakdown of the maturity value, total investment, and interest receivable. For simplified understanding, you also get the data displayed in graphs and charts. This helps in forecasting the yield of your invested funds. 

Features: These tools are easy to use and available on almost all bank websites. They save you the trouble of estimating returns with manual calculation. They also make financial planning easier. As the results are automated, you need not worry about the accuracy. Banks also provide banking apps and internet banking facilities to manage these accounts.


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About Shashank Bhaskar Innovator   Finance Adviser

14 connections, 1 recommendations, 65 honor points.
Joined APSense since, August 9th, 2018, From Mumbai, India.

Created on Aug 10th 2021 01:50. Viewed 76 times.

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