Term Deposit Calculator
Investment Summary
Term Deposit Calculator: Enhance Your Investment Growth Objectives
Explore further with this investment growth planner. The goals help in making decisions of the future or the number of the term deposit to draft to better the financial growth objectives. This tool is beneficial to both the beginners and the experienced investors in the term deposits because of the amount of data embedded therein.
What is a Term Deposit?
The straight money that you invest with these institutions at a predetermined interest against the agreed term is known as a term deposit. If you make term deposits, the key benefit you derive is having a fixed income on your deposit for the agreed investment duration.
How Does the Term Deposit Calculator Work?
The calculator is simplified to show you exactly how ‘exactly’ for example the entire earned interest on one term deposit with the initiation capital, rate of interest and duration. Such investments can be made with accurate information and calculations as by knowing how much can be earned through the investments.
Formula for Term Deposit Calculation.
The Future Value (FV) of a term deposit is determined with the help of the following formula.
F V = P × (1 +nr )nt ,
Where: P = Principal (initial deposit) r = Interest rate per annum in decimals n = Number of times interest is compounded in a year. t = Number of years
Term Deposit Calculator Instruction.
First, you need to enter the principal amount and this is the amount you are planning to invest in the term deposit. Secondly, choose the interest rate through entering the applicable annual interest rate from your bank or financial institution. Third, select the term by indicating how long are you going to make your investment, this can be done in terms of years or intervals of months.
Last and most important step: Click “calculate” and after entering the values click on the ‘calculate’ tab to see what the future value of your term deposit will be.
With the help of term deposits calculator, it would easily enumerate for you values such as how much interest you derived through the term, what would be the maturity amount after the term deposit, and so on.
In case you are wondering about why should one invest or use a term deposit, the answer is simple enough. Guaranteed Return: Term deposits have a set interest rate meaning that they are risk-free and give you a fixed return.
Low Risk: Investors with a Napkin risk appetite are served with a Term Deposit as they have an upfront knowledge of the fixed returns to book.
Flexible Terms: When it comes to term deposits, for each financial goal you can opt for any term deposits with different maturity periods, such as 1 year, 2 years, for example.
Benefits of Using the Term Deposit Calculator
Track Your Investment Growth: Be able to make a rough calculation about the amount of interest you will receive in the future depending on your investment.
Compare Different Options: Choose interbank term deposits or other institutions with the best term length or deposit interest rate based on your objectives.
Plan for the Future: Have a clear vision about the growth of your future investment which in turn helps you make more informed decisions over a longer period.
Frequently Asked Questions (FAQ)
- What is the deposit required to open a term deposit?
This is not constant across all institutions, but ranges between $500 and $1000 on average.
- When is the interest distributed on term deposit accounts?
According to the stipulations on a term deposit, the interest payout could occur on a monthly, quarterly, or annual basis, depending on the term of the deposit. Some term deposits also work with simple interest and add it to the principal amount.
- Do I have the possibility of getting my funds back ahead of schedule from a Term Deposit?
Yes, it is possible, however it would make you face some penalties, such as losing earned interest on the term deposit. It would be beneficial to let it be throughout the entire period it was meant to be.
- What is the exact method of going about calculating interest on a term deposit?
Usually, interest is worked out on either simple or compound interest. The basic operation of the calculator is compound interest: on the other hand, a few institutions might use simple interest which may change the outlook of the amount received.
- Should I consider putting my money into a Term Deposit?
Term deposits are quite safe because there is little risk that you would lose your money and, most importantly, given the time deposit you’re opening with your maturity date, your expected returns are guaranteed, thus making it wonderful for someone who is risk averse and is trying to save their valuables. However, such returns are expected to be low compared with investments with high risks.
Take Control of Your Financial Future Today
Look for tuition savings options using our Term Deposit Calculator. Term deposit accounts are an ideal option, whether you want to save money for a particular purpose or increase your savings.