Tagged: Fixed Deposits Interest Rates

fixed deposit

Increase your savings with Fixed Deposit

If you keep your money in the savings account, you need to change your habit. You should immediately shift your money to the fixed deposit account and start getting more interest rate on the deposited amount. Fixed deposit is the investment product in which you can put your money for the fixed period of time and earn the rate of interest on it. The saving a this one of the most preferred investment that is opted by the investors.

The main reason behind its popularity is the security of money and good returns. The investment always comes with the risk and hence many people refrain from investing their money. But fixed deposits is devoid of any such risks. The bank keeps the money with them safely and with the maturity of the term the principal amount along with the total interest rate is given to the investors. There is no headache to loose your money to anyone. It also offers a good interest rate over the deposited amount and hence the returns are quite good as well.

fixed deposit

Understanding the fixed deposit:

  • The bank holds your money for the fixed tenure which is selected by you and in return, you can earn the interest rate over it. Thus that interest rate is the profit amount that you will be receiving along with the principal amount.
  • The fixed deposit can be categorised under the short term and mid to large term deposits. It is based on the time period for which the fund is fixed with the bank. The tenure includes from the minimum of 7 days to the maximum of 10 years.
  • If you are in need of imminent fund and thinking to break your FD and use the money of it. Well, you can do that but then you will not get the full benefits of the fixed money. So instead, you can choose to avail the loan against the fixed deposit and meet your financial requirements.
  • The fixed deposit scheme can be tax saving as many banks come up with this option. The total amount taxable can be deducted with the amount fixed. There is a limit to such amount as well and the tax deduction is applied only for  ₹10,00,000. whereas the interest gained is still taxable. Thus, the fixed deposit in overall view is a taxable service.

Eligibility Criteria Required:

Though any individual is eligible to open their fixed deposit account and can enjoy the facilities of earning a good interest rate on the deposited money. But here you will find the other factor that can affect your fixed deposit accounts.Below mentioned individual or group are eligible for a fixed deposit

  • The applicant should be the resident of India.
  • Hindu undivided family
  • Sole proprietorship firms
  • Partnership firm
  • Private limited companies
  • Trust accounts
  • For the investor who book the fixed deposit of worth more than ₹ 50,000, the PAN card is mandatory.
  • For the Senior citizen, the Proof of age is required to establish that they are eligible under the senior citizen category or not.

Documents required:

The documents required by the individual, Hindu undivided family, and sole proprietorship at the time of applying for the fixed deposit are:

  • A coloured photograph
  • Passport/ Driving License
  • Last six months bank account details

Documents required from the trust, association/ clubs for the fixed deposit are as follow:

  • Photographs of the member operating the account.
  • A Copy of the Trust Deed/ Bye- laws of the association.
  • A Copy of registration certificate.
  • A Copy of the resolution of trustee authorizing the member to operate and open the accounts.

Fixed deposit Calculator:

The fixed deposit calculator is the tool that can calcuate accurately the interest amount you will be getting after the maturity of your fixed deposit amount.  Once you feed the details about amount put in FD, the interest rate and the tenure the fixed deposit calculator will immediately calculate the total interest amount and total amount i.e the principal + interest rate. It helps you to compare the rates of different banks and choose the one which is more beneficial for you.

If you want to put your money in the fixed deposit, you should shop around a bit and look for the bank which offers you the best interest rate according to the tenure of the deposit. Make sure to go online and know the rates offered by a different branch. Try to extract the optimum benefits through your fixed deposit and increase your savings with high returns.

Calculate Fixed Deposit Maturity Value

The reason why people choose to invest in the fixed deposit is the assurity of stipulated returns at regular intervals. There is certainty of receiving the investments amount and the accrued interest at the maturity of the plan. Thus, the risk factors associated with these term investments are less. Also, there is no hard and fast rule of making long term investment.

The investment period can be as short as 7 days or lengthy up to a decade. The depositor has the liberty to select the tenure of investment as per his/her financial goals. Moreover, the investment amount and the interest payout frequency is also determined by the candidate opening a Fixed deposit account. The interest can be received monthly, quarterly or annually. The depositor can even opt for cumulative interest.

fixed deposit

Cumulative and Non-Cumulative Fixed Deposit:

Cumulative Fixed Deposit- In this type of deposit, the interest is not payable at the monthly, quarterly, half-yearly or annual rests. Rather it is compounded and rolled out at the time of maturity of the plan along with the original investment amount. The people who do not require regular cash flow can go for this plan.

Non-Cumulative Fixed Deposit- In the non-cumulative form of deposits, the interest is paid out at the monthly, quarterly, half-yearly and annual intervals. This plan is most suitable for people who want to gain regular income.

Types of Interest Calculations:

The Interest of Fixed Deposit is calculated using two different methods – the simple interest method and the compound interest method.

Simple Interest It is the interest that is calculated as a percentage of the initial investment, for the whole duration. This is the straight forward and the fastest method to calculate the interest on the amount deposited. The interest amount calculated using simple interest remains the same throughout the tenure of deposit.

How to Calculate FD Interest at Simple Interest:

The simple interest can be calculated using the simple interest calculator that reveals the maturity value of the plan and the interest yield. The formula used is as follows:

Simple Interest Formula:

A = P (1 + rt)

Where:

A = Total Accrued Amount (principal + interest)

P = Principal Amount

I = Interest Amount

r = Rate of Interest per year in decimal; r = R/100

R = Rate of Interest per year as a percent; R = r x 100

t = Time Period involved in months or years  

Compound Interest – It is the interest which is computed as a percentage of the renewed principal, i.e. original principal along with the accumulated interest of prior periods. Under this method, the interest earned in the previous intervals is added to the initially invested amount. Hence the amount on which the interest for the next period will be calculated rises.

How to Calculate FD Interest at Compound Interest:

To calculate the compound interest use the compound interest FD calculator that will help to compute the realistic maturity value and the amount of interest earned. The compound interest formula is:

Compound Interest Formula:

A = P (1 + r/n) nt

Where:

A = the maturity value of the investment including interest

P = the principal investment amount (the initial deposit amount)
r = the annual interest rate
n = the number of times that interest is compounded per year
t = the number of years the money is invested for

Though the interest calculation method is decided by the bank but the account holder can anticipate the returns by calculating the maturity value using FD calculator. It is simple to use and provides the true insight of the future gain. The user just has to enter the amount, tenure and rate of interest in the relevant fields. Once the information is fed in the calculator the required result is displayed. To clarify how to calculate fixed deposit maturity value let’s take an example:

For Example – The expiration value of term investment of ₹ 10,000 made for the period of 5 years at the quarterly compounding interest rate of 6.00% p.a. will be ₹ 13,469. The total accrued interest will be ₹ 3,469. The per year interest will be:

Year 1 – ₹ 614

Year 2 – ₹ 651

Year 3 – ₹ 691

Year 4 – ₹ 734

Year 5 – ₹ 779

So this is how the interest is calculated using the fixed deposit calculator. The same procedure is followed in the simple interest calculator. Just enter the values and know the yield.

 

To Hike Your Savings Invest in Fixed Deposit HDFC

As savings is considered the best option to keep the future secured, it is important to know which type of savings can be useful and help you reach your financial goals. Though there are different types of savings plans but the best option for people who are looking forward to a safe mode of investment that can yield them regular and fixed returns are fixed deposits. The reason being, once you have deposited the decided amount in the account it will yield interest for the entire period of the deposit.

fixed deposit

There is no risk associated and returns are guaranteed. Moreover, it makes your idle money earn for you. Even you have the option to select the investment period and the Fixed deposit scheme. This advantage is available for the customers opening the fixed deposit account in HDFC. The bank caters the diverse savings requirement of the customers and has proposed different deposit schemes such as:

  • Regular Fixed Deposit
  • 5 Year Tax Saving Fixed Deposit

It also grants attractive returns on the term deposits. The rate of interest prevailing on different tenure is mentioned below:

HDFC Bank Interest Rates 2017:

Investment Period

Interest Rate ( per annum)

For amount less than ₹ 1 Crore For amount of ₹ 1 Crore & above but less than ₹ 5 Crores

Regular

Senior Citizen Regular

Senior Citizen

7 – 14 days

3.50% 4.00% 4.25% 4.75%

15 – 29 days

4.25% 4.75% 4.25%

4.75%

30 – 45 days

5.50% 6.00% 4.25%

4.75%

46 days – 6 months

5.75% 6.25% 4.50%

5.00%

6 months 1 day – 9 months 15 days

6.00% 6.50% 4.75%

5.25%

9 months 16 days – < 1 year

6.25% 6.75% 5.00%

5.50%

1 year

6.90% 7.40% 5.00%

5.50%

1 year 1 day – 1 year 3 days

6.95% 7.45% 5.00%

5.50%

1 year 4 days – 2 years

6.25% 6.75% 5.00%

5.50%

2 years 1 day – 10 years 6.00% 6.50% 5.00%

5.50%

 

Fixed Deposit Schemes:

The following are the schemes proferred by the bank:

Regular Fixed Deposit- The customer can avail the benefit of regular interest on the investment made with the minimum amount of ₹ 5,000. The customer can make the investment for the period ranging from 7 days to 10 years. The TDS is deducted if the interest amount exceeds the limit of ₹ 10,000 in a financial year. The candidates can even earn compound interest by reinvesting the interest earned during the period along with the original investment amount. The candidates opening the account can easily liquidate the deposit and appoint a nominee. The account holder can also avail the sweep-in & super saver facility on deposits held in a single name. The eligible candidates to avail this scheme are:

Eligible Segments:

  • Residents
  • Hindu Undivided Families
  • Sole Proprietorship Firms
  • Partnership Firms
  • Limited Companies
  • Trust Accounts

5 Year Tax Saving Fixed Deposit: Under this scheme, the potential depositor can open an account with the minimum amount of ₹ 100 and in multiples. The maximum investment amount is restricted to ₹ 1,50,000 per financial year. The deposit can not be liquidated before the lock-in period of 5- years which is the maximum tenure. The FD Interest rate is similar to the rate applicable on 5 year deposit. The returns are paid out at monthly and quarterly intervals. The depositor is given tax redemption under Section 80 C of Income Tax Act. However, in the case of joint account, the tax benefit is given only to the first holder. The following can open the 5-year tax saving fixed deposit account:

Eligible Segments:

  • Resident Individuals
  • Hindu Undivided Families

Documents Required: Certain documents are required at the time of booking a deposit. The list of requisite documents is given below:

ID Proof & Address Proof:

  • Passport
  • PAN Card
  • Driving Licence
  • Voter ID
  • Government ID Card
  • Senior Citizen ID Card
  • ID Card Issued by Post Office
  • Bank Statement with Cheque
  • Telephone Bill
  • Electricity Bill
  • Any other ID proof or address proof document can be submitted subject to bank’s satisfaction

Features of Fixed Deposit HDFC:

  • Convenience of booking the deposit online through net banking
  • 0.50% higher interest to the senior citizens
  • Flexible tenure ranging from 7 days to 10 years
  • Super saver facility that allows getting overdraft by linking the fixed deposit to saving/current account
  • Option to transfer funds from the fixed deposit in the saving/current account if the balance in the account is less

 

Earn Good Returns on SBI Fixed Deposits

State Bank of India is the leading public sector bank that has pioneered the Indian banking domain with its customer friendly financial services. All sort of financial needs are taken care of to ensure the customer satisfaction. The bank aims at benefiting the customers and provides good returns on the deposits. It promotes the habit of savings in people by providing fixed deposits at an attractive rate of interest.

The SBI FD interest rate 2016 ranges from 5.50% p.a. to 7.00% p.a. for general public. However, the bank provides an extra interest of 0.50% to the senior citizens. The SBI FD interest rates vary as per the tenure opted by the customer. The customer can make a deposit for the minimum time period of 7 days. However, the bank accepts the deposit for the maximum tenure of 10 years.

fixed deposit

SBI Fixed Deposit Scheme:

The bank has drafted multiple SBI Fixed Deposit Schemes to cater the variant needs of the people. The investor has the flexibility to decide and invest in the scheme that he considers is best for him. The fixed deposits schemes offered by the bank are:

  • SBI MODS
  • SBI Annuity Deposit
  • SBI Reinvestment Plan
  • SBI Tax Savings Scheme

SBI MODS: Multiple Option Deposit Scheme (MODS) is the deposit plan in which the FD account holder has the freedom to withdraw the amount in multiple of ₹ 1,000. The remaining amount in the deposit account yields interest at the same interest rate. The minimum amount required to open the account is ₹ 10,000. The tenure period of the deposit ranges from 1 year to 5 years. The account holder can avail loan against the deposit and can file nomination.

SBI Annuity Deposit: The account under annuity fixed deposit scheme is opened with the minimum amount of ₹ 25,000. There is no maximum limit on the deposit. The deposit can be made for the period 36, 60, 84 or 120 months. Under this scheme, the depositor can pay a lump sum amount and receive the same in the form of EMIs, which is the total of the principal amount and interest on the reducing principal amount.

SBI Reinvestment Plan:In reinvestment plan, the interest receivable is quarterly compounded and added to the principal amount. Then the interest is calculated on the new principal and is paid at the time of maturity. This deposit can be opened with the minimum amount of ₹ 1,000 for the tenure ranging from 6 months to 10 years. The depositor can close the deposit before the expiration date but in such case, the interest will be paid at penal rates. The depositor can take a loan against FD up to 90% of the deposit amount.

SBI Tax Savings Scheme: The customer can avail the benefit of saving taxes on the fixed deposits by investing the minimum amount of ₹ 1,000 for the minimum period of 5 years. The maximum investment amount is limited to 1,50,000. The investor can not withdraw the money before the lock-in period of 5 years and the facility of loan against tax saver deposit is not available.

The investor can compare the gains on various schemes and select the tenure and investment amount by using the SBI Fixed Deposit Calculator. The calculator helps in knowing the maturity value. It calculates the total yield on the deposit remaining with the bank. So, the customer can choose SBI Fixed Deposits for the tenure that will help him accomplish his financial goals.

 

Know What You Yield By Using Fixed Deposits Calculator

Investment in fixed deposits by far is considered the best way of savings as there is surety of getting back the invested amount. Also, there is assurance of receiving the stated interest. The returns on fixed deposits are predetermined. These returns are credited in the depositor’s account either at the time of maturity of the deposit or are paid off at the frequency decided by the depositor. The depositor can calculate the interest on the fixed deposit using the fixed deposits calculator.

fixed deposit

FD Calculator is an online device designed to compute the maturity value of the deposit. It helps in calculating the interest receivable on the fixed deposit made for a certain period of time. It saves time and provides the realistic result. The user can find the future value of a fixed deposit by entering the FD interest rates, deposit amount and the period of investment in the fixed deposit calculator. The value displayed is calculated using the interest calculator formula which is:

A = P (1 + r/n) nt

I  = A – P

The paid on FD interest rates is calculated using two methods. The simple interest method and the compound interest method.

Simple Interest Method – In this method, the interest is calculated on the initially deposited amount for the entire deposit period. The interest receivable remains same throughout the tenure of the period. The returns on such deposits are lower.

Compound Interest Method – Deposits yielding interest at compound interest give higher returns. As the amount of interest earned in the previous period is added to the initial principal and the new amount is taken into consideration for calculating the interest of next period. That is the principal amount keeps on changing during the tenure.

Comparison between interest calculated on fixed deposits using simple interest formula and compound interest formula:

To compare the earnings on fixed deposit yielded on simple interest and compound interest let’s take an example:

Example – A person makes a deposit of ₹ 20,000 for the period of 10 years. The interest on deposit is paid at the FD interest rate of 7.00% per annum. The interest earned on deposit at simple interest and compound interest is given below:

Simple Interest Method:

Deposit Amount -₹ 20,000

Tenure – 10 years

Interest Rate – 7.00% p.a.

Interest Amount – ₹ 14,000

Maturity Amount – ₹ 34,000

The simple interest is calculated using the below mentioned formula:

A = P (1 + rt)

Where:

A = Maturity Value

P = Principal Amount

I = Interest Amount

r = Rate of Interest per year in decimal

t = Time Period involved in months or years

Compound Interest Method:

Deposit Amount – ₹ 20,000

Tenure – 10 years

Interest Rate – 7.00% p.a.

Interest Amount – ₹ 20,031

Maturity Amount – ₹ 40,031

The compound interest is calculated using the formula:

A = P (1 + r/n) nt

Where,

A = the maturity value
P = the initial deposit amount
r =  the annual interest rate
n = the number of times that interest is compounded per year
t = the number of years

The above example shows that the compounded interest is higher than the simple interest. The bank decides the method of calculating interest on fixed deposits. The user can check the amount of interest receivable using the specific fixed deposits calculator.