It is a good financial habit to set aside a savings fund for emergencies as a backup fund. And most people do keep at least a small fraction of this savings in a savings plan. These plans could include banking and other financial instruments with capital protection. A benefit of savings instruments is that they also provide a decent interest rate.
However, it is not necessary that these interest rates can protect your savings from inflation and depreciation over time. In such situations, a savings calculator can be of extreme help. Carry on reading to know more about the savings interest calculator, its assistance to potential savings plans investors and its usage.
What Is A Savings Interest Calculator?
A savings interest calculator is an online tool that helps recognize the required savings based on the interest features of a savings plan. It also helps the user determine the total interest earned during the entire investment duration. For this, the savings calculator uses important information regarding the invested amount, interest rate and mode of interest credits. The calculator will also need to know the investment time and the existing balance in the plan.
Most banking, insurance, and financial support websites have such online savings interest calculators. And most of them offer the savings interest calculation for free, but some ask for the user’s personal information before using it. It is an extremely beneficial tool for savings plans as it can also provide tax saving tips. It can help the user find under which sections they can claim a relaxation for investing in a particular plan.
How To Use A Savings Interest Calculator?
Before learning how to use a savings interest calculator, one must know its key features. That will help them know how each particular input helps find out the final maturity amount of the savings plan. The following are the major features of a savings interest calculator:
Target Savings Amount
Existing Money In Savings
Frequency Of Savings Plan Payment (Monthly, Quarterly, or Annually)
Investment Duration
Annual Interest Rate
When users need to calculate how much savings they should invest in a savings plan, they can enter all the information in the calculator input columns. After that, they just need to press the calculate button given below. And the calculator will show the exact result amount. If the user invests this amount in their savings plan, they will receive the target savings amount within the mentioned time.
What Are The Benefits Of Using A Savings Interest Calculator?
As per the Global Findex Database of 2017, almost 1.2 billion people out of the 8 billion in the world have a savings account. The data also shows that 80% of the population in India above the age of 15 have a savings account. This is an impressive figure considering the huge population of the country.
But the only thing to worry about is that most of these accounts attract only a minimum interest rate as prescribed by the Reserve Bank of India. If these savings were in a high interest yielding savings plan, their savings could rapidly increase while it remains in the account. These are the occasions where a savings calculator plays a major role. Given below are some more specific benefits of a savings interest calculator.
Exact Calculation To Achieve Any Savings Goals
Investors can have different goals from a savings plan based on their current situations. Some common goals to invest in savings plans are higher education, marriage, vacation, medical treatment, retirement fund, purchasing assets, or any specific purpose. With the help of a savings interest calculator, they can know the accurate investment to achieve these goals.
A Perfect Comparison Of Savings Plans Returns
The user can compare several plans with otherwise similar features through the interest rate and mode of interest credit features. So they can figure out the outcomes of all the plans with the same investment amount and duration but different interest rates. And based on the results of the comparison, they can know which plan is more profitable.
Realtime Results Visualization Of Altering Minor Details Of The Plan
The savings calculator also has instant calculations without any assistance from human operators. So the user can see the real-time variation in results as they change the different criteria of the savings plan. This helps them know the effects of the plan’s maturity amount based on the small increments in investment.
After going through every aspect of the savings interest calculator, you would be eager to use one. And especially if you prefer savings plans over investment plans due to their security features. Savings plans also provide you with better assistance due to their liquidity. And with the help of a savings calculator, you can know which plan will provide you further assistance in achieving a greater interest yield. Thus, you can steadily grow your backup fund while remaining idle in a savings plan.
