Investing in a fixed deposit is the best option if you want to save money for your future without taking on too much risk and yet earning money. Also, understanding what you’re going to obtain as returns is also quite straightforward as well.
This post is for you if you’re considering such an investment but are confused about the basic principles involved. Here, we’ll take a look at what a fixed deposit is from start to finish.
Table of Contents
What is a Fixed Deposit?
Investing in a bank or other financial institution with a lump sum for a certain length of time is called a fixed deposit. When you deposit this large money, you’ll be rewarded with interest based on a specified percentage. You will get back your initial deposit plus interest earned towards the conclusion of the term from the banking institution.
A fixed deposit’s interest rate is guaranteed, unlike that of market-linked investment options. In plain English, this implies that the interest you earn on your deposit will not rise or fall with the market. The interest rate on the fixed deposit will always be the same as stated at the time of opening the FD. You may use an FD interest calculator online to get a good idea of how much money you could make from a fixed deposit.
In addition, fixed deposits have a far higher reputation for security than other investing options. Fixed deposits have a negligible chance of default. But there is still a possibility of default. If you put your money into low-quality fixed deposits, you still could lose it.
How Does Fixed Deposit Work?
We have streamlined the definition of fixed deposit for your convenience:
- Depositing a large quantity of money with a bank or NBFC in exchange for a greater interest rate than you would get from a savings account is called a “fixed deposit.”
- An FD might have a term of anywhere between 7 days and 10 years. The money you deposit in a bank immediately begins to accrue interest based on how long the deposit will be kept there. A Fixed Deposit’s principal rule is that the funds may be withdrawn prior to the maturity date. The penalty must be paid if the investment is withdrawn before its maturity date.
- The term of your fixed deposit is up to you. To rephrase, you can open it for as long as there is enough cash.
- There are financial institutions that allow for early withdrawals, but the interest rate they give is usually lower.
- Principal and interest are deposited into the account holder’s bank account on the maturity date.
Best FD Interest Rates 2022
Below is the list of fd interest rates 2022:
|Bank / Company||Interest Rate per annum(Regular) in %||Interest Rate per annum(Senior Citizen) in %|
|Fincare Small Finance Bank||8||8.5|
|ICICI Home Finance||7.1||7.35|
Visit Kuvera to get a detailed explanation of Bajaj Finance FD rates.
How To Open A Fixed Deposit In Kuvera?
First, get the Kuvera app or register on the site.
The second step is to provide personal identification information such as a PAN card, Aadhaar card, and video verification of your face. The SEBI Master Circular on Anti Money Laundering (AML) Standards/Combating the Financing of Terrorism (CFT)/Obligations of Securities Market Intermediaries and the Prevention of Money Laundering Act of 2002 both mandates Know Your Customer (KYC) compliance.
Choose “Invest” from the “Home” option.
Choose “Fixed Deposits” and then choose ‘NBFC FD’ or ‘Bank FD’ to further explore the subheadings.
In the fourth step, Kuvera will present you with a menu of available fixed deposit options. By selecting an FD, you may get more details about it, such as its minimum deposit amount, interest rate, and maturity date. Make sure you know how long you’ll be locked into your set deposit.
In the fifth and final stage, you’ll choose the fixed deposit you want to open and click the “Start FD” button.
You will need to provide the IFSC code, account number, and account type for your primary bank account.
Kuvera’s Fixed Deposit Interest Rate Calculator
For people who have trouble setting aside a portion of their income for future needs, FD can be a simple and effective solution. You can use the FD calculator to see how much your money can grow in a fixed-deposit account over a certain time period and interest rate.
You can estimate your yearly interest from a fixed deposit with the help of Kuvera’s FD calculator. The final amount due at maturity is based on the initial principal amount, the number of years the loan is in effect, and the interest rate in effect throughout that time. With this tool, savers may examine the varying rates of interest given by several banks on FDs over a specified time frame. Kuvera’s online calculator is a quick and easy way to get an idea of when your FD will mature.
How To Use Kuvera’s Fixed Deposit Calculator?
The Fixed Deposit calculator from Kuvera simplifies the otherwise laborious process of calculating the returns on FD. In a matter of seconds, Kuvera will provide you with all the data you need to make the right decision for your Fixed Deposit. You can figure out how much money you’ll get back when your FDs mature and how much interest you’ve earned. The Kuvera FD calculator may be accessed in the following ways:
- Before anything else, put in the sum you’re willing to invest.
- Fixed Deposit Terms: Please Choose an Option
- Put in your interest rate.
- Finally, decide how often you want your interest to compound: monthly, quarterly, semiannually, or annually.
Using the information provided, Kuvera’s FD calculator arrives at the following results:
- Total investment
- Profitable Interest Invested
- Value at maturity