Making an investment is just one part of the entire investment process. The critical aspect of making investments is selecting and estimating your returns. This is an important step as it allows you to understand what will be your maturity amount and what kind of portfolio returns will you be seeing in the future. Most people make FD investments through their bank accounts or through an advisor but are never really aware of the returns they can look forward to. It’s time to educate yourself on your own money and how it operates.
Learning how to track your returns
Equity markets have a daily index and daily prices which you can look up in your trading account and multiply with the number of shares you own of a particular stock. This will give you the value of your holdings on that particular day. You can subtract the initial value of the holdings when you have just bought these shares. This will give you your returns or profit/loss.
Fixed income instruments work in a different manner. You have a fixed rate of interest on FDs and bonds which tell you how much you can expect beforehand. While bonds have further mechanics in play as they are traded on an exchange, a fixed deposit has one interest rate which does not change through the entire tenor of the deposit.
FD Interest Rate Calculation
The earlier method of calculating your interest rate on an FD was manually using the below formula –
M = P (1 + r/n) ^ (nt)
Here – M is the maturity amount
P is the principal or your deposit amount
r is the rate of interest
n is the number of time the interest is compounded
t is the tenor
To make it easier for you, this formula is now created into an automated formula – known as the Fixed Deposit(FD) Rate calculator on Bajaj Finserv website. Thus, you can check the returns before investing.
Choosing the highest-paying FD
As an informed investor, you are looking for the best paying FDs. As per different sources, company FDs are paying the highest interest rates on FD in India 2019. This is because unlike bank interest rates, company FDs are not dictated by directives from the Reserve Bank of India on interest rates. They can set their own rates based on the availability of funds and how many people are ready to take loans. Hence, choosing a company FD is a good option. However, care has to be taken to understand the credibility and worthiness of the company. This is evaluated by checking the ratings given by rating agencies like CRISIL and ICRA. Bajaj Finance FD has been accredited with CRISIL’s FAAA/Stable rating and ICRA’s MAAA/Stable rating. Company FDs like Bajaj Finance FD has been rated safe and secure for your payment of interest and principal on time.
Find the best FD for your needs
Use the Fixed Deposit Rate calculator on Bajaj Finserv website to know the best FD for you. You should have an idea about the principal amount you need to invest along with the tenor you wish to invest in. If you are flexible, you can adjust the tenor to gain maximum returns out of your FD. Follow these steps to use the calculator.
Choose your customer type- new, returning, senior citizen, or Bajaj employee. The rates start from 7.72% for a monthly non-cumulative FD for 12-23 months. Additionally, it increases to 8.6% if you go for a 36-month cumulative FD.Senior citizens can gain an additional 0.35% interest rate. Employees of Bajaj and existing customers receive and an additional 0.25% for creating an FD.
Choose the option between cumulative or non-cumulative FD
Input the principal amount for creating the FD
Input the tenor you wish to make this FD for
will automatically see the interest rate calculation and total maturity amount you will receive when the FD matures