Fixed Deposit is more of a term deposit with an interest rate on the
higher side when compared to the savings bank interest rate and it is
because of the higher interest rate and the low risk in the investment
it is one of the most popular investment choices in India. The interest
rate is fixed for the whole maturity period and even if it fluctuates
during the tenure of your FD , you will receive the same interest rate
which was decided at the time of your initial investment.
Whoever the interest rates differ from bank to bank and this is why it is advisable to do your research properly before opening an FD account so that you receive the best in every way. The interest also depends on the FD tenure or the maturity period. In other words in case the maturity period is long and the FD tenure is on the higher side, the interest rate that would be offered to you might be higher as well. The interest rate is compounded quarterly i.e. every three months in most of the banks. Fixed deposits have extremely low liquidity and you cannot withdraw any amount before the tenure of the FD is over and done with. If that happens you have to pay the penalty for re withdrawal which would reduce your interest rates and also a fine of up to 1% of the amount deposited.
Along with all of the above information it is important to not that you are liable to pay tax on the interest that you earn on your principal FD amount. Depending on the tax bracket in which you fall. The FDs are very safe with stable and predictable returns and they are also very suitable for conservative investors. However FDs are low on the liquidity front, the returns are generally low because of the taxes that are levied on the interest earned.
Before investing in an FD it is always advisable to sit down with a pen and paper and calculate the FD for the decoded tenure, so that you will be able to figure out how much interest you will be earning over the time period. However it is very important to keep in mind that the calculation that is supposed to be done should be accurate. Doing an FD calculation is rather difficult and that is where the FD calculator comes in to play.
Nowadays most of the bank websites and the NBFC websites as well have a FD calculator which lets you calculate the interest that you would be earning over the entire FD tenure in an accurate manner.
You just have to enter the principal amount, the FD tenure, the rate of interest that has been decided and the compounding frequency and your FD interest rate will be calculated by the FD calculator in an impeccable and time-saving manner.
Whoever the interest rates differ from bank to bank and this is why it is advisable to do your research properly before opening an FD account so that you receive the best in every way. The interest also depends on the FD tenure or the maturity period. In other words in case the maturity period is long and the FD tenure is on the higher side, the interest rate that would be offered to you might be higher as well. The interest rate is compounded quarterly i.e. every three months in most of the banks. Fixed deposits have extremely low liquidity and you cannot withdraw any amount before the tenure of the FD is over and done with. If that happens you have to pay the penalty for re withdrawal which would reduce your interest rates and also a fine of up to 1% of the amount deposited.
Along with all of the above information it is important to not that you are liable to pay tax on the interest that you earn on your principal FD amount. Depending on the tax bracket in which you fall. The FDs are very safe with stable and predictable returns and they are also very suitable for conservative investors. However FDs are low on the liquidity front, the returns are generally low because of the taxes that are levied on the interest earned.
Before investing in an FD it is always advisable to sit down with a pen and paper and calculate the FD for the decoded tenure, so that you will be able to figure out how much interest you will be earning over the time period. However it is very important to keep in mind that the calculation that is supposed to be done should be accurate. Doing an FD calculation is rather difficult and that is where the FD calculator comes in to play.
Nowadays most of the bank websites and the NBFC websites as well have a FD calculator which lets you calculate the interest that you would be earning over the entire FD tenure in an accurate manner.
You just have to enter the principal amount, the FD tenure, the rate of interest that has been decided and the compounding frequency and your FD interest rate will be calculated by the FD calculator in an impeccable and time-saving manner.
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