Banks are financial institutions which provide a number of services to their customers such as accepting deposits, providing locker facilities, foreign exchange services, providing loans and overdraft facilities. These deposits are of various kinds such as savings deposits, recurring deposits, fixed and current deposits. The deposits are categorized based on the rates of interest provided.
Fixed deposit is a financial instrument which is provided by a bank to its customers so that they are able to obtain interest earnings, which are more than those obtained from keeping money in a regular savings account. In case of a fixed deposit, the interest rate provided by the bank is higher because the money must remain untouched till the given maturity date. A fixed deposit calculator or an FD calculator may be useful in obtaining the best rates, if an individual is planning to use the fixed deposit facility to assure safe investment.
A question may arise as to why opt for fixed deposits when other financial instruments are available. The following points indicate the benefits of fixed deposits:
• Fixed deposits are the safest modes of investment.
• Fixed deposits assure a fixed source of income. Mostly the interest rates are compounded quarterly and so those who want regular earnings can use fixed deposits as a source of income. It is a popular mode of investment among retired individuals.
• Fixed deposits encourage the habit of saving which is beneficial in the long term.
A FD calculator is basically an instrument which enables one to calculate the return on the principal amount invested. Now, the return or the rate of interest depends on several factors. A FD calculator considers all these factors and then calculates the best rate possible. The factors affecting the interest rates are:
• Age of the customer: a higher rate of interest is provided to senior citizens. Thus, they can save as well as earn by investing in fixed deposits.
• Principal Amount: the interest rate depends on the amount initially invested.
• Period of deposit: banks provide higher rates of interest to customers who invest in fixed deposits for a longer period of time. There are also term deposit for 5 years and even more.
Based on the factors stated above a FD calculator, calculates the rate of interest which can be provided and also the end of the term earnings of the customer. Thus, it a very useful device which calculates the end of term and annual earnings of a customer considering all the variables, assuring that the investor benefits through a FD.
Fixed deposit is a financial instrument which is provided by a bank to its customers so that they are able to obtain interest earnings, which are more than those obtained from keeping money in a regular savings account. In case of a fixed deposit, the interest rate provided by the bank is higher because the money must remain untouched till the given maturity date. A fixed deposit calculator or an FD calculator may be useful in obtaining the best rates, if an individual is planning to use the fixed deposit facility to assure safe investment.
A question may arise as to why opt for fixed deposits when other financial instruments are available. The following points indicate the benefits of fixed deposits:
• Fixed deposits are the safest modes of investment.
• Fixed deposits assure a fixed source of income. Mostly the interest rates are compounded quarterly and so those who want regular earnings can use fixed deposits as a source of income. It is a popular mode of investment among retired individuals.
• Fixed deposits encourage the habit of saving which is beneficial in the long term.
A FD calculator is basically an instrument which enables one to calculate the return on the principal amount invested. Now, the return or the rate of interest depends on several factors. A FD calculator considers all these factors and then calculates the best rate possible. The factors affecting the interest rates are:
• Age of the customer: a higher rate of interest is provided to senior citizens. Thus, they can save as well as earn by investing in fixed deposits.
• Principal Amount: the interest rate depends on the amount initially invested.
• Period of deposit: banks provide higher rates of interest to customers who invest in fixed deposits for a longer period of time. There are also term deposit for 5 years and even more.
Based on the factors stated above a FD calculator, calculates the rate of interest which can be provided and also the end of the term earnings of the customer. Thus, it a very useful device which calculates the end of term and annual earnings of a customer considering all the variables, assuring that the investor benefits through a FD.
No comments:
Post a Comment