Guide: How to Find and Use the Best FD Interest Calculators & Top Fixed Deposit Calculators
You work hard for your money, so why shouldn’t your money work hard for you? This is the core idea behind investments. While you live your life and go to work to earn more, the money you have already earned can earn interest and grow.
There are different types of investments you can acquire. This article will focus on fixed deposits and FD calculators.
Fixed deposits (also known as term deposits) are a safe investment tool for investors who want to make “conservative bets” on their money. You deposit your money with the bank for a fixed amount of time with the understanding that you can only get your money back after the date of maturity.
You and the bank agree to a specific interest rate that they will pay for the privilege of borrowing your money. This is the number you would plug into your FD interest calculator.
Fixed deposits earn more than a savings account would. This is because you are promising the bank they can hold onto your money for a certain amount of time. With a savings account, you can withdraw money as you please (with certain limitations).
Banks prefer when you keep your money deposited because they can lend it out to more people as credit products. As a result, they offer higher interest rates to incentivize people to keep their money with them for a lengthy period of time, hence the reason for term deposit calculators.
Use Your FD Calculator with Confidence (Are Fixed Deposits Insured by the Federal Government?)
Before we get into answering, “What is a bank FD calculator?” and figuring out how to use a term deposit interest calculator, let’s briefly touch on the insurance status of a fixed deposit.
Image Source: Fixed Deposits
In the United States, fixed deposits (referred to as certificates of deposit) are insured by the Federal Deposit Insurance Corporation. This is because they are simply savings accounts with less flexibility, so they benefit from the same kind of insurance savings accounts do. According to the FDIC, this standard insurance amount is “$250,000 per person, per bank, per ownership category.” So when you use your fixed term deposit calculator or long-term deposit calculator, you can rest assured that your money is backed by the good faith of the federal government.
How Do You Use a Deposit Calculator? (Information Required in a Deposit Interest Calculator)
What is a bank FD calculator? As the name suggests, it is a calculator that allows you to calculate how much money you will earn when your fixed deposit reaches maturity. While there are some banks that may offer variable interest rates on their fixed deposits, these investment tools typically come with fixed interest rates. As a result, you can use a term deposit interest calculator to see exactly how much money you will make.
But to properly use a fixed-term deposit calculator, you will need to provide specific information about your fixed deposit so that the FD calculator can properly make the calculation. Whether it’s a short-term or long-term deposit calculator you need, it does not matter. So long as you provide the specified length of time of the fixed deposit for the FD interest calculator, any term deposit calculator will be able to spit out the appropriate numbers.
Fixed deposits go by a number of different names. When you are looking for a deposit calculator, you may hear them referred to differently in some countries. Here in the United States, your bank will refer to them as certificates of deposit. The defining characteristics of this financial product (to keep in mind when you are looking for a deposit interest calculator) is whether it has a fixed date of maturity and whether it is insured by the government.
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What to Enter Into an FD Interest Calculator? (Demonstration Using the Bankrate Term Deposit Calculator)
Bankrate offers a CD calculator, which is a deposit calculator, for consumers who need a deposit interest calculator to figure out how much they have or will earn on their fixed deposits. Bankrate is a website that allows consumers to shop around, learn about different financial products, and compare rates in addition to providing term deposit interest calculators.
What is a bank FD calculator’s required information? Bankrate’s fixed-term deposit calculator is straightforward, user friendly, and simple to use. Their long-term deposit calculator requires your initial deposit, number of months the fixed deposit will be held for, the interest rate, and how regularly the interest will be compounded. Enter all of this into your FD calculator, and the rest of the work will be done by the FD interest calculator.
But what if you do not know what these term deposit calculator terms refer to? Using a deposit calculator will be especially difficult if you do not know what each data field on your deposit interest calculator means. These terms will crop up no matter which term deposit interest calculator you use.
What Is a Bank FD Calculator’s Fixed Deposit?
What is a fixed-term deposit calculator referring to when it asks for your initial deposit? All you need to enter into the FD calculator is the amount of money you initially gave to the bank. It is also known as your principal. This amount that you enter into your FD interest calculator is what is earning the interest for you. Some people will put $5,000 into their term deposit calculator and others may put $500,000 into their deposit calculator. It simply depends on how much you can afford to put aside. (And want to put aside!)
What Is a Bank FD Calculator’s Months?
This is the simplest variable to plug into your fixed deposit interest calculator. You do not need to find either a short-term deposit calculator or a long-term deposit calculator; any term deposit interest calculator will do, so long as the FD calculator allows you to enter the number of months you are keeping the deposit in the bank.
There are penalties if you withdraw the deposit before the maturity date you agreed to with your bank. That number of months you entered in your FD interest calculator is the only reason the bank is extending an interest rate better than a savings account: because they do not have to pay you back the money any time soon.
As a result, if you withdraw the money earlier, you will lose out on earned interest and face a penalty fee from the bank. That monthly number you enter into your term deposit calculator is not set in stone, but if you ignore it, it will cost you.
What Is a Bank FD Calculator’s Interest?
Naturally, any FD interest calculator is going to need you to enter the interest rate into the term deposit calculator. In 2014, certificates of deposit averaged 0.51 percent annual percentage yield. This is the average interest rate across all term lengths.
Of course, the more attractive and beneficial your certificate of deposit is to a bank, the better that interest rate you enter into your FD interest calculator will be. If you are putting in $5,000 for two years into your term deposit calculator, the interest rate you’ve been given by the bank will not be that high. However, if you plan on depositing a large chunk of funds or any decent amount of money for a long-term period, a bank will be willing to extend you a more competitive interest rate.
That being said, sometimes an FD interest calculator is useful for seeing how much money you stand to gain if you choose to exit your current certificate of deposit. Interest rates change, and if you locked into a certain one a number of years ago with a fixed rate but new certificate of deposit interest rates have skyrocketed, you may make more money withdrawing your funds early, paying the penalty, and plunking your money in another certificate of deposit. This is one useful way to crunch the numbers with an FD calculator.
What Is a Bank FD Calculator’s Type of Interest? (Compounding)
Your term deposit calculator will also ask you how frequently the interest is compounded. This is another way in which your FD calculator becomes useful. Using your FD interest calculator, you can compare whether a lower interest rate compounded daily is more beneficial than a higher interest rate compounded monthly on the same initial deposit. Use a deposit calculator to ensure you are getting the best rate for your investment.
Best FD Calculators (FD Interest Calculators Offered by Different Banks)
A quick and easy way to find a term deposit calculator is to visit your financial institution’s website. If you have a fixed deposit with a particular bank, chances are they also have resources like a deposit calculator available to help their customers stay aware of their finances.
But sometimes, big banks do not bother providing those kind of online resources for their customers, especially for something like a CD that is not as commonly sought as a mortgage. Instead, you may just want to crunch some numbers you found while shopping around. In that case, you’re in luck. Below we’ve provided a list of links to term deposit interest calculators that you can use as you please.
Image Source: Fixed Deposit Interest
As shown in our earlier demonstration, Bankrate’s FD interest calculator is a super convenient calculator to use, so long as you have all the information it requires. Simply plug the necessary numbers into the term deposit calculator and voila! There’s your info, ready for you to use for comparison and decision-making.
The Nationwide brand is more well-known for insurance than it is for everyday banking products. But Nationwide offers savings options that include certificates of deposit. As a result, they also have a Nationwide FD interest calculator. After reviewing the interest rates offered by Nationwide certificates of deposit, you can plug them into their term deposit calculator and compare the returns to rates from other banks.
This website is a bona fide platter of financial calculators in addition to its term deposit calculator. You can find a helpful tool for so many of your personal finance needs and comparisons, ranging from mortgages to credit cards, insurance to taxes, and everything in between. Of course, the site also has a helpful FD interest calculator for your term deposit needs.
Ally Bank has built a reputation as a safe, lucrative place to park your savings. The all-online bank saves money from not having to administer brick-and-mortar branches. It passes along these savings to its customers in the form of higher interest rates on savings. This means that they definitely offer certificates of deposit. To help their customers see just how much money they will save with Ally Bank, they provide an FD interest calculator.
Potential or current customers can view the rates offered by Ally Bank on the site. After getting an idea of the rates, they can plug them into the term deposit calculator conveniently available on the site and see how much their money will grow. In addition to its FD calculator, Ally Bank also provides a helpful comparison tool that shows its interest rate in relation to other rates from banks like Wells Fargo and Bank of America.
Ally offers a 1.30 percent APY on two-year fixed deposits and a 1.40 percent APY on four-year fixed deposits. The FD calculator on the site is designed to be used for these specific interest rates and lengths, so all customers need to do is plug their initial deposit into the FD interest calculator.
Fittingly, Interest.com offers an FD interest calculator for its visitors. This term deposit calculator allows for easy number crunching and comparison. In addition, it provides a helpful glossary at the bottom to ensure users know what to enter into each data field of the FD calculator.
Using FD Calculators for Laddering (An FD Interest Calculator Can Help You Build an FD Portfolio)
Once you have become comfortable with using an FD calculator, you can use your FD interest calculator to figure out how to effectively ladder your fixed deposits. Laddering is an investment strategy in which you make separate deposits with different maturity dates.
That way your investments are more liquid and you are not tempted to withdraw early. Additionally, if you reach the day of maturity with one investment you can either spend it or reinvest it in a CD with a better interest rate.
Fixed Deposits Are a Safe, Reliable Way to Grow Your Money
Everybody wants the money they earn to go the extra mile and work as hard as they do.
That said, it can be difficult to do this if you are worried about losing your money to the volatile markets. You don’t have to throw your money into stocks to get a little return on investment. Consider fixed deposits, like certificates of deposit, and use FD interest calculators to make sure you are getting the best possible rate.
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