Depositing money in a Bank Account is a smart strategy to ensure its security. However, it does not grow your money. So, consider investing them. It is an effective way to keep your money working and potentially build wealth. You can today choose from different investment modes. However, opt for an investment instrument that suits your financial profile.
A Fixed Deposit is a better investment option for its simplicity and decent return earning potential. You can make lumpsum investments at a competitive interest rate for a specific tenure. The FD investment earns moderate interest returns through the tenure.
How to earn a monthly income from FDs?
FDs are of two types: Cumulative and Non-Cumulative. Typically, the bank calculates your interest earnings monthly or quarterly. The bank adds your interest earnings to your principal investment with the Cumulative FD on the interest payout date. Simply put, your principal investment increases, giving you a chance to earn higher interest returns.
Upon the interest payout date, the bank credits your interest earnings to the linked Bank Account under the Non-Cumulative FD. You can use the Fixed Deposit interest payout to cover your daily expenses and other financial needs. Opt for the Non-Cumulative FD option to earn a monthly income from your investment.
How much monthly income you earn from FDs?
The FD investment earnings entirely depend on your principal investment and applicable interest rates. The minimum and maximum FD investment amount differs between banks. Approach your preferred bank for specific information. Consider your financial capacity and upcoming obligations to decide on a suitable FD amount. The more significant the FD investment amount, the better.
TheFD interest ratesvary between banks. Explore the market to learn about various bank interest rates. Compare and invest with the bank extending the highest FD interest rates. A higher interest rate translates to better interest earnings. Furthermore, the FD interest rates vary depending on your personal profile. A regular interest rate applies to your investment if you are a young or middle-aged investor.
If you are a senior citizen investor, you can draw ahigher FD interest rate. This lets you gain greater benefits from your FD.
How to determine your monthly income from FDs?
The FD calculator is a fantastic online tool that determines your FD interest earnings and maturity value. Enter your total investment, preferred interest rates, and time. Upon calculation, you get an estimate of the maturity value within seconds. The maturity value is decoded into the total investment and total interest income, giving you a better understanding of the investment returns. Download the Banking App to access the FD calculator free of charge.