Planning your investments today, can be as hassle free and exciting as planning your next holiday. Today, several online tools allow you to ascertain the exact corpus of funds required and how much growth can you expect after a defined time period. This way of speculation is preferred by either extremely young individuals who are just starting to invest or the senior citizens that want to be extremely careful with their limited finances.
While the younger lot may still take some risk and the seniors just want decent returns, it is the desire for safety that unites them. This unity isn’t simply in ideologies. Ultimately, both will also turn to similar investment options. One of these will be a Fixed Deposit (FD). A FD being an institutionalised investment option is reliable and has high demand, always.
But with the evolution of FDs too, today there are so many different types of this one option. You can make an FD with Post office saving banks, commercial banks and non-banking financial institutions (NBFCs). Therefore, ascertaining which scheme to choose can be a tedious task. But not if you look at the rates and make a decision.
THE AVERAGE FD RATE IN INDIA IS 5.5%. As of July 2021, the average fixed deposit interest rates offered for tenors ranging from 7 days to 10 years, for deposits below Rs. 2 crores of major financial institutions, like YES Bank, is 6%.
But for NBFCs, the rates are a tad bit higher and hence more lucrative. At Bajaj Finance itself the rates range from 5.65% to 6.75%. The next step is evaluating the returns on maturity.
To determine the Fixed Deposit maturity amount, you can simply use the Bajaj Finance Fixed Deposit Calculator. A few simple steps are to be followed to check the FD maturity amount. Firstly, go to the FD calculator and choose the type of customer you are. Then put in the FD type (cumulative or non-cumulative) and the amount of your principal and the tenor. The final amount of interest and your total amount earned at maturity will be displayed on the screen.
When you use Bajaj Finance Fixed Deposit calculator, there is an option that appears to choose from cumulative and non-cumulative pay-out options. These two options determine your interest rate and maturity value.
A non-cumulative Fixed Deposit scheme is an option where the interest is payable on a monthly, quarterly, half yearly and yearly basis. This kind of option is designed to suit someone who needs an interest pay-out periodically
A cumulative Fixed Deposit scheme on the other hand is an option where interest is payable at the time of maturity along with the principal. The amount in this case is compounded annually. It is a perfect fit for someone who does not require periodic interest pay-outs.
It is necessary to determine your own needs and requirements before picking a plan. With the help of Bajaj Finance Fixed Deposit Calculator, you can plan your investments by forecasting your returns based on the selected deposit amount, tenor and the frequency of pay-out.
But how is this interest on Fixed Deposit calculated?
The returns on your fixed deposit investments are calculated using your interest rate and frequency of interest pay-outs. The interest rates for Fixed Deposits are compounded periodically and the formula supporting the FD interest rates calculator is put below:
A is the amount on maturity
P is the principal amount
r is interest rate
t is the number of years
N is the frequency of compounding
What exactly is the Bajaj Finance Fixed Deposit interest rate calculator?
Before you invest your money in a fixed deposit, you need to determine the amount of money that you will receive when the Fixed Deposit reaches its maturity. This is where the Bajaj Finance Fixed Deposit is very useful.
How does Bajaj Finance Fixed Deposit calculator work?
The Bajaj Finance Fixed Deposit calculator is very easy to use. You need to put in the fixed Deposit amount and the tenor to calculate the amount receivable on maturity. It is also useful in calculating both cumulative and non-cumulative pay-outs.
How is FD effective rate calculated?
Your interest income and yield of your Fixed Deposit is influenced by the effective interest rate on your deposit. The following formula is use to calculate the effective annual interest rate.
Effective Rate = (1 + Nominal Rate / n) n-1
N is the number of periods per year
Let’s say for example, the annual interest rate is 9%. When the interest rate is compounded annually, it will turn out to be 9.16%.
Special tool for Senior Citizens
Apart from FDs, they can always opt for Senior Citizen Savings Scheme (SCSS). Users can use the Bajaj FD Interest Calculator and see the highest FD rates. They can also use this to ascertain the efficacy of the SCSS and make prudent decisions for the future. The same details as for FD calculation will be required for SCSS’s future’s computation. These include:
- Interest Rates
- Time Period
- Contribution per month
Thus, it is rather simple to use the calculator and you can easily go to Bajaj Finance’s website for any further doubts on the same. Additionally, as a Senior Citizen the company offers you an additional interest rate of 0.25% making your net rate 6.75%. Added to this is the benefit of untimely withdrawals, keeping in mind the need for money in old age.
So, the next time you plan to invest in Bajaj Finance Fixed Deposit, you can use the Bajaj Finance Fixed Deposit Calculator to determine the best Fixed Deposit type and tenor for your needs.