Fixed Deposits are considered one of the safest investment options in India. One of the key benefits of investing in FDs is the power of compounding. Compounding is the process of earning interest on interest. This means that the interest you earn on your FD is added to your principal amount, and then you earn interest on the total amount (principal + interest).
The power of compounding is an important concept that every individual needs to understand to achieve their long-term financial goals. With the help of a Fixed Deposit (FD) Interest Rates Calculator, investors can quickly calculate the estimated returns on their investments. In this comprehensive guide, we will provide you with all the information you need to unlock the power of compounding through fixed deposits.
Over time, compounding can help you grow your wealth significantly. For example, let's say you invest Rs. 10,000 in an FD with an interest rate of 8% per annum. If you leave the money in the FD for 5 years, you will earn a total interest of Rs. 4,000. However, if you compound the interest annually, you will end up with Rs. 4,480 at the end of 5 years. This is because you will earn interest on the interest that you earned in the first year.
FD interest rate calculator and compounding:
The FD interest rate calculator is a tool that enables investors to calculate an estimated interest rate earned on their fixed deposit. The calculator accounts for the investment amount, the duration of the investment, and the interest rate offered by the bank/NBFC. Based on this input, the calculator provides an estimate of the total maturity value and the interest earned. The calculator also considers the power of compounding and hence the expected returns for cumulative and non-cumulative FD for the same tenure, same amount, and same interest rate, differs.
Here is a table showing the maturity amount of your FD for different interest rates and compounding frequencies:
The Bajaj Finserv Fixed Deposit Calculator is a tool that can be used to calculate your expected returns and strategise your investments accordingly.
Bajaj Finance Fixed Deposit:
Bajaj Finance is the largest deposit taking NBFC offering fixed deposit schemes in India. The minimum investment in Bajaj Finance fixed deposits is Rs. 15,000, and the maximum investment amount is Rs. 5 crores. The duration of investment ranges from 12 months to 60 months, and the interest is credited on a monthly, quarterly, or annual basis. Bajaj Finance also offers a higher interest rate of up to 0.25% p.a. to senior citizens. You can always visit the Bajaj Finance website to check the FD interest rates in 2023 offered by the company.
In conclusion, fixed deposits are an excellent option for investors seeking steady returns on their investments. By using an FD interest rate calculator, investors can easily estimate the total value of their investments and the returns they can expect to earn. With a bit of planning and foresight, investors can unlock the power of compounding through fixed deposits and achieve their long-term financial goals. The longer you invest your money in an FD, the more time compounding has to work its magic. So, if you are looking to grow your wealth over the long term, FDs are a good option.