FD Calculator: Fixed Deposit Interest Rate Calculator

Why To Use Bank Interest Rate Calculators?

It is important to remember that on large sums of money, even a 0.25 per cent interest rate differential can mean a lot.

So, for example if RBL Bank offers higher interest rates than ICICI Bank, which it does at the moment, you can opt for RBL Bank. You do not have to worry that the bank does not have a branch in your area. You can open a fixed deposit online and most banks send executives to collect the form and stuff.

So, comparing fixed deposits online through the use of calculators, will be advantageous for you. There are a few things that you must remember when it comes to bank fixed deposits. One is you should remember that there is a tax applicable on these deposits.So, if your interest amount is more than Rs 10,000, the bank will deduct TDS. In case, you do not wish that TDS being deducted you should submit form 15G and form 15H.

What is Fixed Deposit?

A fixed deposit (FD) is a financial instrument provided by banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date. It is known as a time deposit. They are considered to be very safe investments.

Features of Fixed Deposit Account

The main purpose of FD account is to enable the individuals to earn a higher rate of interest on their surplus funds. The amount can be deposited only once. Next time deposits, separate accounts need to be opened. The depositor is given a fixed deposit certificate for proof, which depositor has to produce at the time of maturity or renewed for a further period. Nominee person entitled to receive funds accrued in a particular FD upon depositor's death.

Benefits of Fixed Deposits:

• Always the rate of interest is high in Fixed Deposit compared to other deposits.
• Customers can avail loans against FDs up to 80 to 90 percent of the value of deposits.
• A wide range of tenures, ranging from 7 days to 10 years, to suit your investment plan.
• Facility of automatic renewal.
• Tax Saving benefits on 5 year plus FDs qualify for deductions U/S 80C of the Income Tax Act,1961.
• FDs become an attractive investment avenue as they offer good returns and are almost completely secure with no risk. You are assured of returns for your investment.

Disadvantages of Fixed Deposits

• FD as an investment is less risky then this aspect is the reason why its returns are lower compared to other risk investment options.
• Then there is an issue of liquidity, while your money is locked up with the bank, it is not easy to withdraw at a moment's notice.
• In fact if you withdraw before the agreed duration, you will be penalised.
• Also, there is no tax benefit in below 5 year fixed deposit investment, unlike the infrastructure bonds or the National Savings Certificate (NSC). So, even from a taxation point this is not the best of investment options.

�