Union Bank of India Fixed Deposit offers investors high interest rates at minimum risk. Following are some of the key features of a Union Bank of India fixed deposit account:
Union Bank 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 duration in years, investment amount, and target amount. The output Union Bank FD calculator provides aids in better financial planning.
However, one must understand that the Union Bank FD Calculator only provides an estimation and doesn’t guarantee any returns. The actual return might vary, and the exact maturity amount will be known only after one invested in Union Bank FD.
Before investing, it’s always a good idea to calculate the potential returns. As a result, it is easy to make smarter investing decisions. To put it another way, evaluating returns in terms of wealth acquired rather than a percentage helps people to manage their financial goals better. There are two ways one can estimate the returns from FD investment using Scripbox Union Bank FD Calculator: investment amount approach and target amount approach.
Following are steps that you can follow to use the Union Bank FD Calculator using the Investment Amount Approach:
After all the inputs are entered, the Union Bank FD calculator automatically computes the interest and maturity amount. In the tabular format, the Union Bank FD calculator shows the interest earned every year along with the yearly opening and closing balance. Alternatively, the graphical representation shows the growth of Union bank FD investment over time (initial investment and maturity amount).
The target amount approach helps in determining the amount that one should invest today to achieve their target amount on maturity from the Union Bank FD investment. Following are the steps that one needs to follow to use the Union Bank FD Calculator using the Target Amount Approach:
The Union Bank FD calculator estimates the investment amount needed to achieve the target and also the interest one might earn. Moreover, the Union Bank FD Calculator shows a tabular representation of opening balance, interest earned and closing balance for each year.
The interest amount from Union 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 Union Bank 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 reward that one earns for investing money for a predetermined period at a fixed interest rate.
Simple Interest = (P * R * T)/ 100
P- Principal investment amount, R- Interest rate of Union Bank FD (%), T- Tenure of the Union Bank FD
Ms Aishwarya wants to invest INR 35,000 for six years at an interest rate of 5.6% per annum.
For Ms Aishwarya, the principal amount (P) is INR 35,000, the rate of interest (R) is 5.6%, and tenure (T) is six years.
Simple Interest = (INR 35,000 * 5.6 * 6 years)/ 100 = INR 11,760
Maturity Value = Investment + Simple Interest earned during the tenure of investment
Maturity Value = INR 35,000 + INR 11,760
Maturity Value = INR 46,760
Compound interest is the income that the investor earns on the principal investment amount and accumulated interest. Through the power of compounding, one can earn interest on interest. The interest earned will majorly depend on the tenure, compounding frequency and interest payout. Higher the duration of the investment coupled with more compounding periods can result in higher income in the form of interest. Also, lower or no interest payment frequency will also lead to higher interest income. For some of Union Bank FDs, the interest is compounded every quarter.
A = P (1+r/n) ^ (n * t)
A = Amount at maturity, P = Principal Investment, r = Rate of interest (in decimals), n = number of times interest is compounded, t = tenure in years
Ms Aishwarya wants to invest INR 35,000 for six years at an interest rate of 5.6% per annum, compounded quarterly.
For Ms Aishwarya, the principal amount (P) is INR 35,000, rate of interest (r) is 5.6%, tenure (t) is six years, and the number of compounding periods is 4 (n)
Maturity Amount = 35,000 (1+0.056/4) ^ (4*6)
A (maturity amount) = INR 48,862.86
Interest income = INR 48,862.86 – INR 35,000 = INR 13,862.86
The Union Bank of India fixed deposit interest rate ranges between 3% to 5.4% p.a. Also, the Union Bank of India offers preferential interest rates for senior citizen depositors, and they range between 3.5% to 5.9%.
The highest FD rate for Union Bank of India is 5.4% for a regular investor for the tenure of 5-10 years. Also, for senior citizens, the highest Union Bank of India FD interest rate is 5.9%.
The Deposit Insurance Scheme insures the Union Bank deposits up to INR 5,00,000. Hence Union fixed deposits are considered safe.
Union Bank provides its depositors with a facility to avail a loan up to 90% of the deposit against their FDs. A loan against the FD not only allows investors to meet their financial gaps but also helps in meeting liquidity requirements without breaking Union Bank FD.
Union Bank of India allows its investors to withdraw the deposit amount prematurely. However, Union Bank charges a penalty for premature withdrawal. The terms and conditions of premature withdrawal vary as per the terms of the Union Bank of India.
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