Fixed Deposit Calculator: Earn up to 9.5% FD return! This is what you earn as interest payout on Rs 10 lakh deposit
Fixed deposit (FD) or term deposit is a very good investment option which gives depositors an opportunity to earn decent and fixed returns on their investments for specified periods. Depositors set aside their idle money for a fixed period and earn interest on it at regular intervals during the tenure they choose for FD maturity.
Fixed deposits have been a popular choice among investors as it not only offers income certainty but also gives capital protection. FDs are the most preferred investment choice for conservative investors, especially senior citizens. Senior citizens are very particular about their money and investments as they want to play safe in terms of risk-taking and at the same time they want some fixed income to meet their expenses during their retirement years. Also, fixed deposits are an ideal investment tool for realizing short-term financial goals and for building a good corpus of emergency funds.
For fixed deposit holders, there are two modes available for earning interest on their deposits. There are two types of FD plans – cumulative and non-cumulative. In cumulative FD plans, the interest payout is added to the principal amount at the time of maturity. This is suitable for those looking at a long-term wealth accumulation without bothering for periodic interest payouts. In the non-cumulative FD plans, depositors are paid interest on a regular interval, usually monthly. Retired individuals, especially senior citizens prefer non-cumulative FD plans as they need a fixed monthly income to meet their daily expenses.
Senior citizen FD rates offered by banks and NBFCs
Banks and non-bank lenders are currently offering FD interest rates of up to 9.50% per annum to senior citizens on tenures ranging from 7 days to 10 years. Senior citizens often get better deals on FDs than non-senior customers.
Highest fixed deposit rates by banks
Small Finance Banks often beat their large peers when it comes to fixed deposit interest rates. Take a look at the rates being offered by some of the major small finance banks.
(Source: PaisaBazaar)
Highest fixed deposit rates by non-bank lenders
Fixed deposit holders get better interest rates from non-banking finance companies (NBFCs). Their rates are even better than small finance banks.
(Source: PaisaBazaar)
Investors must note here one important point before investing in any FD schemes that only bank FDs are covered under the Deposit Insurance and Credit Guarantee Corporation (DICGC), giving investors an assurance that their capital is protected. The DICGC covers all deposits such as savings, FDs, current accounts, recurring deposits. Each depositor in a bank gets insurance of up to a maximum of Rs 5,00,000 for both principal and interest amount.
Fixed deposit calculator
At the highest rate of 9.50% per annum, the monthly interest on an FD comes to Rs 7,916 on Rs 10 lakh FD. At 8% rate, the interest payout on the same deposit amount would be Rs 6,666. At an interest rate of 7% per annum, a fixed deposit of Rs 10 lakh would yield a monthly interest of Rs 5,833.
Banks and NBFCs usually offer senior citizens higher interest rates over regular customers. This difference can be up to 80 bps to 100 bps, depending on tenures. Banks also launch time to time special senior citizen FD schemes for senior citizens with high rates and good features.