Bank of Baroda is a trusted name in India’s banking sector. Apart from offering an array of financial services to its customers, the bank provides fixed deposit plans to those looking for secure investment options.
Fixed deposits are an ideal investment option for individuals with a low-risk appetite. Since the performance of FDs is not subjected to market fluctuations, investors can earn guaranteed returns from them. However, while the risk of losing parked funds is minimal in the case of FDs, one still needs to make an informed decision before investing in them. Fortunately, the Bank of Baroda FD calculator allows one to do just that.
Available online, these calculators can help investors gauge profitability before investing in FDs. However, to compute FD gains, one needs to learn more about the calculator’s functionality, benefits, and more.
With this financial tool, an investor needs to input just a few parameters to determine their returns from FD investment. These factors include the investment sum, interest rates, maturity term, and frequency of compounding interest.
Also Read, Bank of Baroda FD Interest Rates
BOB fixed deposit calculator uses a specific mathematical formula to determine the maturity amount for FD investments. An investor needs to learn this formula to understand how each parameter affects fixed deposit earnings. This formula is,
A = P(1+r/n)^n x t
Example of BOB FD Calculation
To understand the utilization of the above formula to calculate FD, one can refer to the example below –
Mr. Raj is 42 years old and looking to invest Rs.50,000 in BOB FD. He chooses a tenure of 2 years and picks annual interest computation. From the table given below, it can be determined that Raj will receive a yearly interest of 5.7%. Therefore,
P = Rs.50,000
r = 5.7/100 = 0.057
t = 2
n = 1
A = 50000(1+0.057/1)^1 x 2
A = Rs.55,862
Return on investment is equal to Rs.(55,862 – 50,000). Therefore, interest earnings for Raj on this investment are Rs.5,862.
As one can see, this is a complex procedure to calculate fixed deposit earnings. The easiest method is to use a Bank of Baroda FD calculator, which provides results in a matter of seconds.
Fixed deposit investments involve parking a considerable surplus amount for a predetermined tenure. Thus, a BOB FD calculator is an essential tool for most prospective investors since it allows one to evaluate his/her ROI. It is beneficial due to the following factors –
With a Bank of Baroda FD interest calculator, a potential investor can set a realistic expectation regarding return on investment. However, to use this tool, one would need to know the interest rates that the Bank of Baroda offers to its clients.
Each parameter in FD calculations influences the outcome or returns from this investment. An investor needs to ascertain how a change in these factors alters the ROI. For instance,
Additionally, deciding to compound FD interest more frequently can lead to slightly higher returns, overall. An investor needs to keep these factors in mind to maximise earning potential from fixed deposits.