You can live paycheque to paycheque and be satisfied believing you are financially well-off. However, it isn’t the case. Living paycheque to paycheque only means that you are focussing on the present and not planning for the future. Having a sizeable savings fund to meet the financial requirements of the future is very crucial.
That’s why it’s suggested to keep saving as much as you can to create a savings reserve that can come to your rescue in times of need. You can also follow an efficient approach of saving – and investing in fixed deposits and recurring deposits as your financial preferences and goals demand.
It is also recommended that you use an FD interest calculator and a recurring deposit calculator before getting started. We will be telling you all about this tool and the two savings schemes here.
What is a Fixed Deposit and Recurring Deposit Scheme?
A fixed deposit scheme and a recurring deposit scheme are offered by numerous banks, post offices and non-banking finance companies in India. They are designed to help individuals save in a systematic and methodical way. You can set up a fixed deposit account and a recurring deposit account in your bank account if you already have one.
Even though both these savings schemes are similar in a lot of ways, they primarily differ in the modes of deposits. While a fixed deposit scheme requires an individual to invest only once, a recurring deposit invites regular monthly deposits. The tenure of both schemes varies according to banks. While a fixed deposit account can have an investment period ranging between 7 days to 10 years, a recurring deposit comes with a tenure ranging between 6 months to 10 years.
While both savings schemes offer a fixed interest rate to the investors, these rates differ according to the bank. Generally, a fixed deposit scheme offers a higher rate of interest. This is because RD invites monthly deposits, and so the interest is credited accordingly. In RD, the amount is deposited once, and the interest is accumulated every year.
You can use an FD interest calculator and a recurring deposit calculator to get started. These tools should be preliminarily used before you invest in the scheme. We will be learning how an FD interest calculator and a recurring deposit calculator help you in just a moment.
Which Savings Scheme to Choose?
Both these savings schemes are unaffected by market movements and offer guaranteed returns regardless of the market conditions. Hence, these schemes are ideal for investors looking for investment safety more than returns. Moreover, such schemes are suitable if you are willing to stay invested for a longer duration.
However, if you are planning to choose one of these savings schemes and can’t decide which, here’s a tip.
Observe your financial preferences. What seems more suitable to you? Investing in a lump sum or investing regularly? A recurring deposit scheme is ideal for salaried individuals who can afford to invest regularly in the scheme. A fixed deposit scheme, on the other hand, is ideal for individuals who find it hassling to invest every month.
Moreover, you can also use an FD interest calculator and FD calculator to calculate the maturity amount and eventually go with the one that gives you a higher maturity amount.
What are an FD Interest Calculator and Recurring Deposit Calculator?
An FD interest calculator and a recurring deposit calculator are two digital tools that compute the maturity amount of your investment in the schemes at the end of the tenure. They are simple to use and ease decision-making. Let’s understand how.
How can an FD Interest Calculator and RD Calculator Support Investment Decision Making?
An FD interest calculator and a recurring deposit calculator can help your investment plans for the future.
As a first-time investor, it is only natural to be conflicted about the amount to invest and the tenure you should be investing for. Both these figures depend on the returns you are expecting. In other words, you might be unsure if a particular investment amount would give you the returns you are looking for at the end of the tenure. This is where an FD interest calculator and a recurring deposit calculator come in to save the day. You can compute the maturity amount using these tools and see if the amount aligns with your financial goals.
For instance, you choose to invest in a fixed deposit scheme and are planning to invest INR 5,00,000 in the scheme for a tenure of 10 years. You get an interest rate of 8% from the bank. Once you use the FD interest calculator, the maturity amount will be INR 11,00,000 (Approximately). You can now check if the amount aligns with your financial goals. Is the maturity amount something you were expecting? If yes, you can decide to go ahead with the investment.
Final Thoughts
Both an FD interest calculator and a Recurring Deposit interest calculator are free-to-use. All you are required to do is enter the required values, and the tools will compute the results for you in a jiffy! So, why wait when you can make better investment decisions with the help of these tools?
