Fixed deposits have been the most popular investment instrument for investors in our country. Investors have always looked for guaranteed returns that had no risk and FDs catered to that. As an instrument, FDs offer the facility of stashing money aside and earning a predetermined rate of interest from it. Despite its caveats, FDs help investors achieve their short-term financial goals.
Though investing in FDs seems easier, an investor may find it confusing to calculate the returns on an FD. That is no longer the case with the help of online FD calculators.
By considering variables like principal, tenure, and interest rate of the FD scheme, the BOI FD calculator will determine the returns on FD and the maturity amount to be received at the end of tenure. The Bank of India (BOI) FD calculator calculates FD returns based on the popular concept of compound interest using the FD formula. The interest on fixed deposits is of two types - simple interest and compound interest. While both are used invariably, we often observe that investors either prefer cumulative FDs where the interest is received at maturity along with the principal investment amount, or noncumulative FDs where interest payouts are done periodically, i.e., monthly, quarterly, half-yearly, or annually, and the principal amount at maturity.
- The FD formula considers three factors - principal amount, interest rate, and tenure.
- Here’s the FD formula:
- m = p (1 + r/n) ^ nt
- m = the amount you will receive upon maturity
- p = the amount you are looking to invest
- r = rate of interest
- n = frequency of compounding
- t = tenure of the deposit
Using the online BOI FD calculator has never been easier. Here are the steps to follow:
Let’s suppose that you want to invest Rs. 1,00,000 in an FD with the Bank of India for 3 years. The interest rate is 7% p.a. Considering these values, you can estimate your interest and maturity proceeds using the online BOI FD calculator as follows.
Step 1: Visit the BOI FD Calculator on Angel One.
Step 2: Enter Rs. 1,00,000 in the "Total Investment" field.
Step 3: Choose the duration of the FD as 3 years.
Step 4: Select the interest rate as 7%.
Step 5: You can instantly view your interest and maturity proceeds. While the estimated interest would be Rs. 23,144, the total maturity amount comes to Rs. 1,23,144.
Some of the benefits that come with using an FD calculator are:
- Safety: Safety is the paramount feature of an FD, given the fact that they have no risk and are not affected by prevailing market conditions.
- Know estimated earnings: As an investor, you can save time and effort involved in manual calculations by opting for the calculator using multiple tenures, different amounts, and various interest rates.
- Comparative Analysis: The FD calculator enables ease of calculations on your investment against other instruments like mutual funds, bonds, etc. which helps investors with their decision-making.
Regular Tenure Schemes:
This is the normal FD offered by the bank - where it has multiple durations with the least one starting from 3 days and increasing upwards.
BOI allows recurring deposits where the tenure of RD is in multiples of months and the corresponding rate of FD will be applicable. The minimum value of RD is Rs 500 and thereafter in multiples of 100.
BOI Star Sunidhi Deposit Scheme:
The BOI offers this scheme to HUFs and Individuals where the minimum and maximum deposit amounts are Rs 10,000/- and Rs 1,50,000/- respectively. It has a five-year lock-in period and is tax exempted under Section 80C of the Income Tax Act.
Double Benefit Term Deposit (DBD):
This scheme is useful for short-term and medium-term investments ordinarily ranging from 12 months to 120 months and provides a higher yield on the principal at the end of the stipulated period as the interest is compounded on a quarterly basis; but, the principal and the accrued interest are paid only at the end of the period.
- Principal: It is the amount you invest initially.You must understand that a higher investment amount attracts higher interest.
- Interest rate: It is the rate that determines the amount you will receive beyond the principal investment amount. A higher interest rate results in higher earnings.
- Tenure: FDs usually have high-interest rates for longer tenures which results in higher earnings.
- Compounding frequency: This talks about the frequency or instances interest is calculated on your investment and hence, a higher compounding frequency means higher earnings.
- Taxation: FD attracts tax on its interest. So, the tax liability decreases your earnings.
- Inflation: FDs are fixed rate investments, which don’t change with the inflation rate. As a result, FDs fail to earn inflation-beating returns.
The BOI FD calculator is an online tool to determine the earnings and maturity proceeds of an FD offered by BOI.
The process is very simple and quick. All you need is the principal, interest, and tenure details to get your estimated earnings on maturity.
Yes. The BOI FD calculator online is free to use.
There are two ways of doing this - manually or by using an online FD calculator. The second way is more convenient as it helps to eliminate human error, offering accurate information.
Yes. BOI charges a penalty on premature withdrawals done before a specified period.