You can simply use a monthly FD payout calculator to instantly know the interest payout you will be receiving. To know how this calculator works, read on.
The interest you earn from your Fixed Deposit depends on 4 parameters:
- Principal: The initial amount that you put in.
- Tenor: The time period for which you will be holding the FD.
- Payout frequency: Monthly, quarterly, half-yearly, yearly or directly at maturity? This decision will play a major role in deciding the amount of interest you will earn.
- Type of customer: Whether you are a new customer, senior citizen, etc. will determine the rate of interest you are eligible for.
- Cumulative v/s Non-cumulative monthly FD payout
An FD amount calculator will give you figures for both; cumulative as well as non-cumulative fixed deposits. Cumulative FDs offer a higher rate of interest as they have only a single payout option, i.e. at the time of maturity. This kind of FD is preferred by someone who has a sufficient amount of money to put aside and is looking to build wealth over an extended period of time. Cumulative FDs do not give monthly payouts.
To earn from fixed deposits every month, you need to opt for a non-cumulative FD. They provide the flexibility to choose from four payout options – monthly, quarterly, half-yearly and yearly. But higher the payout frequency, lower the interest rate. Nevertheless, non-cumulative FDs are perfect for senior citizens who are searching for a regular income source to look after their daily household expenses. The continuous flow of income also helps the depositor take care of short term financial goals. Before investing, use the FD amount calculator to calculate expected returns.
- Systematic Deposit Plan
With monthly payouts, one FD is now also providing the option of monthly deposits. Bajaj Finance FD has introduced a Systematic Deposit Plan (SDP), under which investors can avail all the traditional and modern advantages of a fixed deposit with a brand new method. SDP allows for small monthly deposits so investors don’t have to wait for a huge amount to accumulate before investing in fixed deposits. They can choose to make minimum 6 and maximum 48 deposits for a tenor of 12 to 60 months. Each deposit will earn the interest rate prevailing on the day of that particular deposit. This plan makes the tool of fixed deposit open to early investors who prefer to go for a low risk and stable investment option.
- Choosing the FD provider
In India, fixed deposits are provided by banks as well as Non Banking Financial Institutions (NBFCs). To choose the right FD, you need to consider the interest rates, the credibility and the facilities provided by these organisations. Some of the best interest rates are offered by NBFCs; like Bajaj Finance FD gives up to 7.85% interest to its investors, depending on their eligibility. With highest stability ratings – CRISIL’s FAAA/Stable rating and ICRA’s MAAA (stable) rating and an international rating of ‘BBB’ by S&P Global, you can be more than sure that your money is safe hands.
Facilities like loan against FD, multi deposit facility, auto renewal and an easy account opening process make Bajaj Finance FD an ideal option for all kinds of investors. Moreover, it has the FD amount calculator with which you can determine your investment amount, tenor and payout frequency by testing different values before making a decision. Also, the interest rate for Senior Citizen Fixed Deposit Scheme is 0.25% higher than regular FD interest rates.
The fixed interest rates offered by term deposits enable us to predict the returns and interest earnings easily. However, since different banks and finance firms compound the interest as per different terms and conditions, manual calculations might not produce accurate results. Moreover, the complexity of the manual calculation makes it time-consuming and you also need to put some effort to calculate the returns correctly.
Therefore, it is better to use the online FD amount calculator that is available on the websites of your financier. Due to the present economic situation, banks have lowered their FD rates and therefore, you can invest in company FDs such as Bajaj Finance FD that offer interest rates up to 7.85% for senior citizens and 7.60% for regular customers. The investment can be made using an online application form.