Be it any investment scheme, knowing its basics and what it is all about is very important before putting in your hard-earned money. Gone are the days when the investment was about putting some chunk of your monthly earnings aside. As times have advanced, people are looking for more versatile investment options to create wealth.
However, when it comes to Fixed Deposits, it is considered one of the safest investments in India due to the lucrative Fixed Deposit Interest Rate that, firstly, offers good returns and, secondly, offers guaranteed returns.
Also known as Term Deposit, a Fixed Deposit or FD is one of the most sought-after investment schemes in the current era. This is because it offers a fixed term with a fixed return, and one can easily invest a sizeable amount of money. So basically, an FD offers a guaranteed fixed return because the Fixed Deposit Interest Rate is pre-decided for a fixed period.
A cumulative FD 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 and then paid with it when the tenure ends.
This type of FD pays accumulated interest regularly to those who have invested. Moreover, it depends on the investor’s interest that the interest should be monthly, quarterly, half-yearly or yearly.
One of the top reasons why an FD is said to be a wise investment in our country is because it offers guaranteed returns.
(Tip: Use a FD calculator to calculate FD interest before investing.)
Investment schemes 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.
FD can easily be broken before it matures. When there is an emergency, you can withdraw the amount anytime, just for a minor penalty.
Around six months back, even though I was planning to invest in Fixed Deposits but a close friend of mine advised me first to use an FD calculator to calculate FD interest. Believe me, it helps a lot as you get to know exactly how much return you’ll be getting when your tenure ends.
Here, it’s better if I share my personal experience so that all the readers can understand the entire process easier. 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 –
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