You may consider investing a large portion of your savings into FDs so that they give you high returns on maturity, just in time for your retirement. However, investing without calculating your returns isn’t advisable, as you may fall short of funds and not earn the amount that you need.

Also, knowing your returns in advance will help you choose issuers and financial institutions that pay higher interest on your FDs. So, rather than choosing an issuer in an ad-hoc manner, follow the steps below to calculate your FD return in advance using a FD Calculator.

Step 1: Decide on the type of FD and the amount you want to invest

In order to earn more from your `FD investment`, decide whether you want to withdraw the interest earnings on your investment on a regular basis or want it in a lump sum at maturity. If you prefer the latter, invest in a cumulative FD, and, for regular payouts choose a non-cumulative FD. Also decide upon how much you will invest. Once you decide the principal amount and type of interest enter it into the FD calculator.

Step 2: Enter the tenor and frequency of compounding

You can invest in a fixed deposit for a few days or stay invested for years. It all depends on the goal of your investment, and the amount you choose to invest. After you have finalised the amount and the FD variant, decide the compounding frequency by choosing between quarterly, monthly, and yearly interest payout options. Use the `FD calculator` to see how when you change the tenor and compounding frequency, the maturity amount changes. This will allow you to select the right tenor and frequency.

Once you enter these details into the calculator, it will display the maturity amount that you will get based on the compounding frequency you choose. The formula employed for annual compounding, for instance, is:

A = P (1+R/100) ^N

Here, ‘A’ is the maturity amount, ‘P’ is the amount you invest, ‘N’ represents the tenor in years, and ‘R’ stands for the interest rate.

Step 3: Search the market for the highest FD interest rate and then calculate to compare

While you will get the results after you complete step two, remember that numerous banks and NBFCs offer FDs on varying interest rates. However, company fixed deposits lead the way, as they offer higher interest rates as compared to banks. So, choose Fixed Deposits from issuers like Bajaj Finance, and enjoy high interest rates of up to 8.75% on your investment.

Apart from guaranteed returns, you can benefit from features such as a `loan against your FD`, online account management, and an easy application method. Furthermore, you get 0.25% extra interest when you renew your FD. So, once you calculate returns for one FD, do so for the others that you have selected and choose the one that offers you high returns.

Now that you know how easily you can view the amount that you will receive when your FD matures, be sure to take this calculation into consideration when deciding upon an investment amount. This is the easiest way to be certain that you will be able to retire comfortably.