# Investment Calculator- Make a Perfect Plan to invest your money

According to a recent survey, almost 56% of Indians claim that they do not possess enough know-how to manage their finances effectively. Investments are a major part of a healthy financial corpus for future needs. Nevertheless, hasty investments are never the solution. An individual needs to consider the returns from their investments before proceeding to park their money in certain schemes.

An investment calculator will help determine the most-suitable investment option, based on the different types of investment. A prospective investor needs to know the various aspects necessary to use such a tool effectively.

## Different factors of calculation

An investment calculator takes into consideration a variety of factors that impact your revenue.

1. a) Initial investment – It is the starting corpus of investment eventually leading to final balance or future value that an investor desires to reach.
2. b) Rate of return – The rate pertains to alterations in the investment value or its cash flow, comprising of dividends or interest payments. The rate of return for this calculator is the percentage rate amount invested for a period of one year, also known as the annual rate of interest.
3. c) Term – It refers to the period of investment on which the returns are calculated.
4. d) Compound interest – Compound interest has substantial impact over the final balance of an investment, particularly if it is long-term. The interest accrues not only on the initial invested amount but also the balance generated on the previous interest. With compounding, the interest gained increases.

### How to use investment calculator?

Investment is a broad term that includes various kinds of schemes and instruments. Since fixed deposits are one of the most popular forms of investment in India, here is a complete procedure to use a fixed deposit interest rate calculator.

• Step 1: The first step involves choosing whether an investor is a senior or non-senior citizen. Most financial institutions offer higher interest rates to individuals over 60 years of age.
• Step 2: Next, an investor must specify the principal sum of their deposit. This refers to the initial amount of money that he/she is looking to park in the FD account. Various NBFCs have different policies when it comes to the minimum investment amount. At any rate, higher investment quantum is desirable since returns from them would also be higher.
• Step 3: Finally, the investor needs to select an applicable tenor for such an investment. Tenor range varies between the several financial companies. Still, in most cases, one can invest in FDs for 1-5 years. Longer tenor results in higher returns, while limiting the maturity term also restrict earnings considerably.
• Step 4: Enter the rate of interest, depending on the NBFC of an investor’s choice.

After entering all of these details, investors can quickly get an idea regarding the interest earning they can expect from their deposit.

A fixed deposit interest rate calculator is not only helpful in determining returns but also assists in picking the best investment option. An individual can use the return rate from various financial companies to understand which one is suitable for their goals. Thus, comparing the various FD options also becomes simpler and more convenient.

Those looking to streamline their financial plan should conduct such calculations without fail. Doing so should help in making an informed decision that limits regret in the future.

Bajaj Finance, among other NBFCs, offers attractive interest rates on its Fixed Deposit account to the tune of 8.10%, which may also go up to 8.35% due to the additional returns of 0.25% over and above the regular interest rate offered to senior citizens. It also offers the Systematic Deposit Plan feature in which each deposit will be treated as a separate fixed deposit. This feature allows lump sum corpus growth without the need to invest a lump sum initially.

Investment calculator is a useful tool for investors as it helps them to compute earnings even before making the investment. It not only helps in the cost-benefit analysis but also in determining the quantum of amount that should be invested in obtaining desired return.

Author Bio:

Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at Highlight Story