In the current world, rising expenses and inflation are reducing the value of your savings in real-time, the market is facing constant fluctuation, and growth has staggered; it is now the time to look for secured investment options to ensure that your money is not just safe but doesn’t lose its value year after year, from planned expenses like education, weddings, and retirement to medical or any other financial emergencies.
In situations like this, a fixed deposit is the best way to secure your finances and ensure that you are not losing money but instead are able to keep up with inflation and have money stored to deal with these expenses. But what is an FD, how does it work, and how can individuals use an FD calculator to plan their finances accurately and make informed decisions? Keep reading to find out.
What is a fixed deposit?
A fixed deposit is a form of secured investment in which an investor deposits a lump sum of money in exchange for a fixed return on that investment. Unlike recurring deposits, which involve making smaller deposits over a set period of time, or mutual funds, where the money is subject to market risks, the funds invested in, the fund manager, etc., FD is an excellent investment choice.
How does an FD work?
A fixed deposit works by putting a lump sum amount in an FD bank account for a fixed tenure at a pre-approved interest rate. Once this tenure is over, your principal amount and the earned interest will be directly credited to your account.
This interest earned can be acquired in several ways: the first is to get it monthly, the second is to get it quarterly, the third is to get it annually, and the fourth is to get the interest payout at the end of the FD maturity, where the interest will be reinvested into the amount for greater compound interest over time.
Senior citizens also have a higher interest rate than ordinary investors, depending on the specific duration of the investment and the bank used for the investment. Some banks also have different interest rate categories, where higher investment amounts can lead to higher interest rates. Thus, it is beneficial to assess this threshold and make informed decisions.
One more thing to note is that the interest rates are non-linear, which means that although it might suggest and is valid for most cases, the longer the duration, the higher the interest rate one can get. However, certain special FD durations, like one year and 21 days or three years and six months, can ensure maximum return on investment.
This can become complicated and lead to some confusion, but with the right FD calculator and some intuitiveness, you can calculate and maximise your ROI without having to spend countless hours of research figuring it out.
How to use an FD calculator?
If you are looking for the right app to invest in fixed deposits and want to maximise your ROI while ensuring maximum security and peace of mind, Bajaj Finserv is the best option. Not only has Bajaj been a reputed name in the finance industry for several decades, but Bajaj Finserv is the easiest to use and most comprehensive application to solve all of your financial needs.
From investment options like fixed deposits and mutual funds to loans such as home loans, car loans, professional loans, gold loans, vehicle insurance, for home, etc., UPI, bill payment options and much more. Whatever your need, whether it is investment, loans, or bill payments, Bajaj has got you covered.
In this case, Bajaj is also a leading NBFC offering financial services in fixed deposits and offering an FD calculator for its customers to make informed investment decisions. To use an FD calculator from Bajaj Finserv, you just need to download the app from the Apple App Store or Google Play Store and follow the given instructions.
- Download the app from the App Store or Play Store.
- Sign up after entering your mobile number.
- On the home page, you will see an icon for Fixed Deposit.
- Click on it and use the built-in FD calculator to simulate different situations by changing the customer type, deposit amount, tenure, and interest payout frequency.
- This will help you make the best decision and get the best return on your investment.
Once you are satisfied with your investment outcomes, click the “Invest Now” button on the FD page, fill in those values, and complete the sum transfer. You have completed your FD investment smoothly and securely.
Conclusion
An FD is an excellent investment option for the majority of home investors and those who do not wish to risk their money but also do not want just to let it sit in a savings account, losing value over time, whether it is by withering due to growing inflation or a plain increase in the cost of living over the years. So secure your today and tomorrow by investing and making informed choices which maximise your return at the end of it all.
