The Benefits of Using FD Interest Rate Calculator
When you lock in money for a fixed deposit, you want to know how much you stand to gain at the end of the maturity period. Of course, you can do the calculation manually. But there is an easier way.
A fixed deposit calculator can help you speed things up. Just enter the principal that you invested, the tenure that you’ve opted for, and the interest rate that you receive on the deposit. Once all of this is done, you’ll receive a figure that will be the amount that you receive at maturity.
Using the different features available in a fixed deposit interest calculator, you can make an informed decision regarding the investment you plan to make. It helps you know which investment is beneficial. There are different investment calculators online that you can use, with each bank offering their own version.
As an investment, a fixed deposit can offer you tax benefits under the Section 80c of Income Tax Act of India. But you need to have a fixed deposit account in the tax benefit category.
If you have a lump sum, you can invest it on fixed deposits. The fixed deposit calculator will help you understand the breakup of the amount and the return on investment you’ll receive after maturity.
Though banks and other financial institutions in India use a fixed deposit compound interest calculator, you can calculate compounding on daily, monthly and yearly basis using the maturity calculators available on any online platform.
Factors Responsible for Interest Rate fluctuation
During the time of opening a fixed deposit amount, deposit the amount of money you want to keep as fixed deposit. You have to make the payment once during the entire time period of the deposit.
Based on the amount and time period, you’ll be provided with a fixed rate of interest by the concerned bank. You should make a comparison of the rates you’re offered by different financial institutions. That way, you can find out which bank is giving you the most for your money.
You’ll be provided with a fixed rate of interest even if the interest rate fluctuates. There are some factors that make the rate of interest fluctuate; the interest rate can increase or decrease. The factors responsible for fixed deposit interest rate fluctuation in India are as follows:
RBI (Reserve Bank of India)
As Reserve Bank of India is the central bank of our nation, it has all the authority and power regarding any monetary policy. They have the complete authority to change any policy when the country’s economy demand or any other situation occurs.
When the repo rate of RBI decreases, the rate of interest on fixed deposits that banks or other financial institution offers are also get affected and gets lowered.
Recession
Recession means slowdown of economy of a nation. In order to come out of the situation, the Reserve Bank of India increases the supply of money in the market.
As the money supply increases, the rate of interest is decreased. Due to this, the interest rate on the fixed deposits also gets lowered.
Inflation
The term inflation means price rise. It leads to devaluation of currency and decreases the power of purchasing over the amount lent.
In such cases, banks or other financial institution offer a high rate of interest on fixed deposits. By offering higher rate of interest on fixed deposits, they attract people to deposit more cash and make up the loss occurred on interest on lent loans.
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