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About DHFL Fixed Deposit
The Dewan Housing Finance Corporation is a finance company that enables low and mid-income groups in India to avail of affordable housing finance. The company offers several financial products and services to its customer, of which one of the most popular ones are fixed deposits.
Fixed deposits have always been the safest option for individuals to park their excess funds. DHFL offers a plethora of options to potential FD investors when it comes to terms and interest rates. Moreover, utilising a DHFL FD calculator can simplify the process of investment significantly. This computation tool can be effective in determining the exact profitability of DHFL FD investment.
An FD calculator is an indispensable tool when it comes to facilitating a simple and profitable investment in FDs. An individual, after entering the requisite details in the calculator, can expect to see a complete breakdown of their expected maturity amount. Further, this tool also highlights the interest earnings from such an investment.
Benefits of DHFL FD Calculator
Listed below are some of the advantages of utilising DHFL fixed deposit calculators.
- Manual calculations of FD deposits can be lengthy and time-consuming, making the process quite convoluted. Using the calculator ensures fast and convenient calculations.
- It effectively eliminates the risk of faulty or erroneous calculations, which is one of the most frequent problems that can arise in due course of manually calculating FD ROIs.
- It allows for the adjustment of parameters to reach the desired outcome. This feature of the calculator makes it easy for users to try several combinations of parameters before they can reach their desired results.
- These calculators allow users to gauge the importance of FD interest rates for calculating their profitability.
Understanding DHFL FD rates
Potential investors can refer to the table below to glean the interest rates applicable to their investment, based on their age and other terms –
|Maturity term||Non-senior citizen FD rates||Senior citizen FD rates|
How does the DHFL FD Calculator Work?
Regardless of whether an investor uses such a calculator or not, understanding the formula for this computation is essential. Therefore, here is a look at the formula used –
A = P(1+r/n)^n x t
The parameters in this equation are as follows –
- A – maturity amount
- P – Investment sum
- r – Interest rate, expressed in decimals
- n – Frequency of interest computation
- t – maturity term for FDs
Example of DHFL FD Calculation
To ensure a better understanding of FD calculations, refer to the example of Riya’s investment, given below –
27-year-old Riya is looking to invest Rs.20,000 in DHFL FD for a term of 2 years. She decides to pick an annual interest compounding method. Referring to the table above, it is clear that the interest rate on her FD would be 8.75%. Here,
P = Rs.20,000
r = 8.75/100 = 0.0875
n = 1
t = 2
Therefore, placing the parameters in the equation –
A = 20000(1+0.0875/1)^1 x 2
A = Rs.23,653
While this represents the maturity sum on Riya’s initial investment, it does not showcase her interest earnings. To determine interest earnings, one needs to follow –
Interest = A-P
Thus, interest earned on Riya’s FD investment is Rs.3,653.
Rather than following this lengthy procedure, using a DHFL FD rates calculator is faster and more convenient. Nevertheless, investors must ensure that they enter all parameters correctly. Failing to do so will still lead to faulty results even while utilising calculators.
How do Various Factors Affect FD Interest Earnings?
As mentioned previously, four parameters are crucial for the proper functioning of an FD calculator DHFL. Each of these factors can influence the outcome by either increasing or decreasing ROI for fixed deposits.
- Investment amount
The quantum of investment plays a crucial role in determining profitability from such ventures. For instance, a person investing Rs.10 lakh for 5 years will earn more interest than another individual investing Rs.1 lakh for the same term. This remains true even when all other parameters are the same between the two investors.
Therefore, to maximise gains from FDs, one must park a significant sum. One can notice the same when using a DHFL Bank FD calculator as well.
- Tenure for investment
Shruti invests in an FD for a year, while Atul invests for five years. Considering the principal sum to be the same for both, it is safe to assume that Atul earns greater interest. This happens primarily due to the difference in interest rates based on the investment tenure. Banks tend to offer increased interest to long-term investors.
- Frequency of interest payment
Another vital factor for DHFL Bank FD calculator is the interest payment frequency. Investors can pick between quarterly, half-yearly and annual compounding methods. While one is free to choose any of the methods he/she pleases, their choice will influence total interest earnings. Compounding interest more frequently generally leads to higher interest earnings on the invested sum.
Learning about these factors allows individuals to make sound financial decisions. It further encourages responsible investing, ensuring balanced finances for investors.
- What is the maximum interest rate applicable for DHFL FD investors?
If you are a senior citizen investor, you can take advantage of up to 9.75% interest per annum. For non-senior citizen investors, the highest rate achievable is 9.25% per year.
- If I cannot increase the term or interest on FD, how can I maximise my returns?
In such an event, you can maximise interest-earnings by increasing the principal investment sum. This should boost overall profitability from the FD investment.
- Can I withdraw my FD investment prematurely?
Yes. One can easily withdraw FD investment before its maturity. However, doing so may lead to additional charges, as per the bank’s policies.