Karur Vysya Bank Fixed Deposit offers investors high interest rates at minimum risk. Following are some of the key features of a Karur Vysya Bank FD account:
Karur Vysya Bank (KVB) FD Calculator is a simple online tool that helps in estimating the returns from an FD investment. The FD calculator only requires simple inputs like rate of interest, investment amount, target amount, and duration in years. The output Karur Vysya Bank FD calculator aids in better financial planning.
However, one must understand that the KVB FD Calculator only provides an estimation and doesn’t guarantee any returns. Also, the actual return might vary, and the exact maturity amount will be known only after one invested in Karur Vysya Bank FD.
Before making an investment decision, it’s a good idea to consider its potential returns. This allows for better investment planning. In other words, estimating returns in terms of wealth gained rather than a percentage helps individuals in planning their financial goals better. There are two ways one can estimate the returns from FD investment using Scripbox Karur Vysya Bank FD Calculator: investment amount approach and target amount approach.
Following are steps that you can follow to use the KVB FD Calculator using the Investment Amount Approach:
After all the inputs are entered, the Karur Vysya Bank FD calculator automatically shows the interest and maturity amount. The Karur Vysya Bank FD calculator shows a tabular format of the interest earned each year along with the opening and closing balance. Moreover, the Karur Vysya Bank FD calculator gives a graphical representation of the initial investment and maturity amount.
While the investment amount approach requires an individual to enter the investment amount, the target amount approach estimates the investment amount based on the amount one expects from the Karur Vysya Bank FD investment. Following are the steps that one needs to follow to use the Karur Vysya Bank FD Calculator using the Target Amount Approach:
The Karur Vysya Bank FD calculator gives the investment amount needed to achieve the target and estimates the interest one might earn. Moreover, the Karur Vysya Bank FD Calculator shows a tabular representation of opening balance, interest earned and closing balance for each year.
The interest amount from Karur Vysya Bank FD investment depends on a number of factors such as investment amount, tenure of the FD, compounding frequency, and the rate of interest. One can estimate the interest earned from KVB FD using two methods, namely, simple interest and compound interest. Let us understand the interest and maturity amount calculation using both methods with the help of an example.
Simple interest is the amount that one earns for investing money for a predetermined period at a fixed interest rate. KVB pays simple interest for monthly, quarterly, half-yearly payouts for all its deposits.
Simple Interest = (P * R * T)/ 100
P- Initial investment, R- Interest rate of KVB FD (%), T- Tenure of the Karur Vysya Bank FD
Ms Kirti wants to invest INR 40,000 for 10 years at an interest rate of 5.75% per annum.
For Ms Kirti, the principal amount (P) is INR 40,000, rate of interest (R) is 5.75%, and tenure (T) is 10 years.
Simple Interest = (INR 40,000 * 5.75 * 10 years)/ 100 = INR 23,000
Maturity Value = Investment + Simple Interest earned during the tenure of investment
Maturity Value = INR 40,000 + INR 23,000
Maturity Value = INR 63,000
Compound interest is the income that the investor earns on the principal plus the interest accumulated so far. In simple terms, compounding means earning interest on interest. Also, the more the number of compounding periods, the higher will be the interest amount the investor receives. However, investors will gain from compounding only if they opt for payout of interest on maturity as the interest will be compounded and the wealth gained from the investment will be higher. KVB pays compound interest only on certain deposits and the interest is compounded and paid directly upon maturity.
A = P (1+r/n) ^ (n * t)
A = Investment value at maturity, P = Initial investment, r = Rate of interest (in decimals), n = number of times interest is compounded, t = investment duration in number of years
Ms Kirti wants to invest INR 40,000 for ten years at an interest rate of 5.75% per annum, compounded quarterly.
For Ms Kirti, the principal amount (P) is INR 40,000, rate of interest (r) is 5.75%, tenure (t) is ten years, and the number of compounding periods is 4 (n)
Maturity Amount = 40,000 (1+0.0575/4) ^ (4*10)
A (maturity amount) = INR 70,794.81
Interest income = INR 70,794.81– INR 40,000 = INR 30,794.81
The Karur Vysya Bank fixed deposit interest rate ranges between 3.5% to 5.65% p.a.Also, Karur Vysya Bank offers preferential interest rates for senior citizen depositors. The KVB FD rates for senior citizens range between 3.75% to 6.15%.
The highest FD rate for KVB is 5.65% for a regular investor for the tenure of 3-10 years. Also, for senior citizens, the highest KVB FD interest rate is 6.15%.
The Deposit Insurance Scheme insures the Karur Vysya Bank deposits up to INR 5,00,000, hence Karur Vysya Bank fixed deposits are considered safe.
KVB provides its depositors with a facility to avail a loan against their FDs. The interest rate of the loan will be 1%-2% above the FD interest rate. Also, a loan against the FD allows investors to meet their financial gaps and liquidity requirements without breaking KVB FD. The terms and conditions of the loan vary as per Karur Vysya Bank norms.
Karur Bank allows its investors to withdraw the deposit amount prematurely. However, KVB charges a penalty for premature withdrawal. For deposits up to INR 2 crore, the penalty is 1% on the contracted interest rate. Whereas, for deposits above INR 2 crore, the bank norms will apply. The terms and conditions of premature withdrawal depend on Karur Vysya Bank norms.
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