Knowing what you’ll reap out of your investment is very crucial. This helps you to get an idea of what you’ll get in the coming years so that you can plan your financial goals accordingly. Therefore, in order to live the life that one always desires, it is essential to start saving a small portion of your earnings.

What is a Fixed Deposit?

Fixed Deposit or FD is one of the most sought-after investments in the current era as there is a fixed term with a fixed return. It is basically an investment offered by banks where one can invest a sizeable amount of money. This is because the Fixed Deposit Interest Rate is pre-decided for a fixed period. 

What are the two types of fixed deposits?

• Cumulative fixed deposit

A cumulative FD is a type of FD that accumulates the interest amount until maturity. The interest amount here is compounded every quarter or every year. Moreover, the earned yearly interest is added to the principal amount. It is then paid along with it at the end of the tenure.  

• Non-cumulative fixed deposit

This type of FD pays the accumulated interest regularly to the investor. It totally depends on the investors interest that the interest should be monthly, quarterly, half-yearly or yearly. It is important to know that the interest rates vary for each payout option.

What are the top features of an FD?

• Guaranteed Returns

One of the top reasons why an FD is said to be a wise investment is because it offers guaranteed returns. These returns are over the returns you get on your savings account.

• Low Risk

Investment options such as mutual funds, bonds and stocks give you high returns but are volatile as they are linked to market risks. So, people who are not ready for risks can invest in FDs. Moreover, If you go for the right fixed deposit interest rate and tenure, they are an excellent option for your long-term financial goals. 

• Easy Withdrawal

FD can easily be broken before it matures. When there is any kind of emergency, you can withdraw the amount anytime, just for a small penalty. 

(Note: Don’t withdraw unless there is an emergency, as it may affect the returns) 

How to Calculate FD Interest Rate Online via an FD calculator?

Here, it’s better if I share my personal experience for a better understanding for all the readers. Now, I have been using the Bajaj Finserv Application on my smartphone to pay my mobile and electricity bills. Recently, I checked out their Fixed Deposit calculator when I was planning to invest. Here is a step-by-step guide – 

1. 1. Download the application on your smartphone.
   2. Enter your personal details and sign up
   3. Open it and tap on the top left icon with three lines.
   4. Choose the ‘Try our Calculators’ option.
   5. Go to Deposits Calculators
   6. Tap on Fixed Deposit Interest Calculator.
   7. Enter the details
   8. You are good to go nameviser