The future value of investment will be
One of the most secure investment options for a retail investor is a Fixed Deposit (FD), which offers higher returns than regular savings accounts. These are fixed-return investments, and the maturity amount doesn’t get impacted by the changes in the market. Because of the fixed nature of the investment, you can predict the returns even before you invest. An online FD calculator makes it possible for anyone to compare options before making a purchase. One such online tool using which you can determine the returns on a Canara Bank fixed deposit is the online Canara Bank FD calculator.
The maturity amount and interest on an FD can be determined easily and conveniently using the online calculator. It aids in making informed financial decisions and budgeting. You can use the Canara Bank FD calculator anytime for free on Angel One.
An FD calculator is a simple financial tool developed for investors to help them calculate the maturity amount in advance. The calculator works based on the compound interest formula. It uses variables like the principal amount, tenure, and the bank's interest rate to estimate the interest and maturity proceeds. All you have to do is enter the variables in the calculator. And the online Canara Bank FD calculator will instantly calculate the interest and maturity amount.
A fixed deposit is a financial product where the principal amount grows at a fixed rate of interest. The amount is invested for a fixed tenure and compounds periodically. The principal, holding period, and compounding frequency will affect the maturity amount of an FD. Hence, in the FD calculation formula, the primary three variables are the principal, percentage of interest, and tenure.
Here is the Canara Bank FD calculator formula:
Maturity amount = p (1 + r/n)^nt
p = principal amount
r = rate of interest
n = frequency of compounding
t = tenure
Anyone can use the online Canara Bank FD calculator. It is a simple tool that helps you calculate the exact return on your FD investment accurately and without manual effort. Follow the steps mentioned below to use the online tool:
- Enter the principal amount that you want to invest.
- Select the expected rate of interest on the FD.
- Choose the tenure for which you want to park your fund.
Here is an example to help you understand the working of the calculator better:
Suppose you want to invest Rs. 1,00,000 in an FD for 3 years at an interest rate of 7.1%. Here is how to use the Canara Bank FD calculator on Angel One’s website:
- Enter the principal amount, i.e. Rs. 1 lakh
- Enter the expected interest rate of 7.1%
- Choose the tenure or duration as 3 years
You will get the following results:
- The future value of the investment, that is, the maturity amount, would be Rs. 1,23,508
- The estimated return would be Rs. 23,508
FD is a widely used traditional investment product for generating fixed returns with principal protection. Online FD calculators have simplified the FD return calculation process by eliminating the scope of error in calculation. These are the most prominent benefits of using an online FD calculator:
- Online calculators calculate the returns accurately and quickly without human effort, allowing you to have clarity on your returns even before you spend your money. Using an online calculator eliminates the chance of error.
- Comparing returns on different FD products allows you to make an informed choice - select the highest return-generating FD to maximise income.
- Online calculators like Canara Bank online FD calculators save time and make the calculation process speedy. FD calculation using the compounding interest formula is tricky and time-consuming, which makes it difficult to do manually. On the other hand, these are simple tools designed to simplify the complex mathematical formula of FD calculation.
- Using FD calculators helps with financial planning and budgeting. With the help of these tools, you can spread your investable money efficiently to match long and short-term financial goals.
- These tools are free and accessible to everyone over the internet. One can use these tools as often as required without paying any charge.
- Tenure: The interest rate is often directly related to the FD's duration. Most banks will offer higher returns if you choose a longer investment period. Moreover, it will allow your money to compound, resulting in higher returns.
- Principal amount: Although the principal amount doesn’t influence the interest rate, it impacts your return on maturity. Your returns will increase the more you invest. In some cases, the bank may offer a special rate of interest if your investment amount exceeds a predetermined threshold.
Interest rate: In the case of FD, the rate of interest remains fixed during the tenure of the investment. Hence, the higher the interest rate, the higher your earnings. So it makes sense to look for banks and financial institutions that offer higher interest rates to boost your income. You should also make sure to check the financial institution's credit rating to confirm the safety of the principal.
- Principal: In many cases, the interest on a fixed deposit is directly proportional to the principal. The higher the principal, the higher the interest. For instance, you will earn a higher interest on investing Rs. 1 lakh compared to investing Rs. 50,000. Suppose the interest rate is 7% p.a. and the tenure is 5 yrs. Then your interest earnings will be Rs. 41,478 in the first case and Rs. 20,739 in the second.
- Interest rate: The higher the interest rate, the higher the earnings. For instance, if the principal is Rs. 1 lakh and the tenure is 3 years, you will earn Rs. 16,075 interest if the rate is 5% and Rs. 23,144 at the rate of 7%.
- Tenure: Generally, the longer the tenure of the fixed deposit, the higher the interest rate, which translates into higher earnings. Moreover, having a longer tenure means keeping the principal invested for additional time periods, which will increase the number of interest payments made.
- Compounding frequency: The higher the compounding frequency, the higher the compounding effect and hence, the higher the earnings.
- Taxation: FD interest attracts tax. Therefore, a higher tax liability reduces your earnings.
- Inflation: If the inflation rate exceeds the FD interest rate, the real value of your earnings will be eroded.
You should enter the following details in the FD calculator -
- Principal amount
- Expected interest rate
The FD maturity amount will automatically appear based on a compound interest formula.