Stock Market vs. FD Returns Calculator Overview

Any salaried person or a businessperson considers FD or fixed deposit as the ideal option for investment with the aim of getting a good return. Storing money in a bank offers excellent security. However, before investing in FDs, investors should consider if they are truly saving money or losing it. Many who look forward to building their wealth and are ready to take risks consider stock market investment.

Choosing between investing in stock market shares and making a fixed deposit is quite confusing for many people. Firstly, it is essential to recognize that there is a significant difference between these two financial tools. Fixed income is relatively less risky and offers a guaranteed return, whereas the first is an equity transaction with significant risk.

The return from both may vary and to know how precisely you may get a return, you can use the stock market and FD return calculator. Both offer you a projected return that can help you to invest accordingly.

Stock Market vs. FD Returns Calculator

What is a Fixed Deposit?

Banks and NBFCs provide fixed deposits, a type of savings tool that allows customers to deposit money for a predetermined amount of time and earn a more significant interest rate than they would on a savings account. The duration of the investment is seven days to ten years. However, withdrawing FD before its maturity can lead to penalties. However, there could be penalties for withdrawing money from FD too soon.

What makes FD different from a savings Account?

A savings account is a basic bank account that allows a person to deposit and withdraw money as well as earn interest. But compared to FDs, savings account interest rates are far lower—only 3-4%. Unlike savings accounts, one cannot take money out of or put it into an FD whenever they choose. Moreover, investors who own FDs profit tax-wise, whereas savings accounts do not.

What is a Stock Market?

The stock market consists of different exchanges, including bonds, securities, and other shares. Under the stock market, an investor gets shares or ownership of the company. If the market condition of the company is good, the investor may earn a good return on selling the shares.

How do you earn from the Stock Market?

Unlike FD, where you get interest rates from the bank, an investor purchases stocks of the company, holds them, or sells them if the market condition is good. Investors sell the stock of the company when the price of the stock increases. Compared to FD, an investor investing in the stock market earns a good return.

What Factors to Consider when investing in the stock market or FD?

When it comes to deciding whether to invest in FD or the stock market, there are certain factors to consider: 

  • Objectives of your Investment

The objective of the investment matters the most. If your objective is to have a short-term income, then FD is the best option. Similarly, if your financial goal is long-term, the stock market is the best option.

  • Risk Tolerance

You need to assess your risk tolerance before deciding between investing in stocks and fixed deposits. If you are worried about the volatile nature of the stock market, then FD is the right option. But if you have a good risk tolerance and know strategies for earning from trading, the stock market is the best.

Understanding Stock Market and FD Returns Calculator

No matter which option of investment you choose, using the online return calculator is the best. Both FD and the stock market calculators allow you to check how much returns you can expect.

What is a Stock Market Return Calculator?

A Stock Market Return calculator is an online tool that determines the returns on an investment amount made in each stock over a given period. This easy-to-use calculator gives you the ability to confidently make well-informed decisions to invest regardless of your experience level.

What is an FD Calculator?

The FD or fixed deposit calculator will help you to know the amount you will receive added with interest upon withdrawing the amount. Using an FD calculator, you can compare the interest rates and maturity amounts of FDs provided by various financial institutions. It will further allow you to make sound decisions.

FD vs Stock Market – Which one to choose?

The decision to choose between FD and the stock market entirely depends on your financial goal and how much risk you are ready to take. Learning insight about both is essential. Moreover, you can make the best use of the stock market and FD return calculator, which will help you get the proper income projection.

FAQs – Stock Market vs. FD Returns Calculator

1. What is the formula for the FD Return Calculator?

Ans. There are two different types of FD accounts you can choose from – Simple Interest FD and compound interest FD.

For simple interest FD, the formula is –
a) M = P + (P x r x t/100), where –
b) P is the principal amount that you deposit
c) r is the rate of interest per annum
d) t is the tenure in years

For compound interest FD, the formula is-
a) M= P + P {(1 + i/100) t – 1}, where –
b) P is the principal amount
c) i is the rate of interest per period.
d) t is the tenure

2. Do the return from FD is effected by the inflation?

Ans. Yes, there is a high chance of a reduction in the interest rate on FD. You may either get low or zero.

3. What are the Benefits I can get with FD?

Ans. There are different benefits FD can offer. Some of these are –

a) You are eligible to take a 70-80% loan on your FD.
b) It is best for those with surplus cash funds and want to earn extra from interest rates.

4. What benefits does the stock market calculator offer?

Ans. Using the stock market calculator, you can identify which is the best stock that can generate enough returns. Furthermore, it also aids in figuring out whether a company is overpriced or cheap.

5. What is the formula of a stock market calculator?

Ans. Using a stock market calculator, you can calculate the return on investment. The formula for the stock market calculator is –
ROI is equal to [(SP * NS) – SC] – [(NS * BP) – BC]

6. How do I Calculate returns on my stock investment using the calculator?

Ans. It’s easy to use the stock return calculator. To determine the possible returns for a specific time, enter a few basic parameters into the calculator, such as the investment amount and the name of the company.