4 Important factors to keep in mind to calculate your investment returns


In today’s financial space, investment options are aplenty and depending on the type of investor you are, you can choose options that align with your goals. On one hand, you have the low-risk, moderate-yield options such as an FD, and on the other you have the high-risk, high-yield options such as Initial Public Offerings.

While it is important to know when and how to invest, it is equally important to calculate your returns to see whether they’re assured or not before you invest. Read on to know more about the important factors you need to keep in mind when calculating returns on your investments.

Interest rate offered by the investment

When investing, first check the interest offered on the option you choose. This is because interest is the primary mode of earning returns on your instrument. Similarly, when you decide to calculate returns, you need to know the percentage of returns you can expect and whether or not it is guaranteed or is subject to market fluctuations.

To accurately forecast your earnings, you’d need to choose investment options that guarantee fixed returns. This is where a fixed deposit investment stands out as it parks your money on a fixed interest rate and assures you returns based on the payout frequency you choose. Given the current FD rates in India, investing in an FD now could also yield you significant gains. NBFCs like Bajaj Finance Fixed Deposit are leading the market with high interest rates, flexible tenor and high credibility ratings.

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The risks involved in an investment

To accurately assess your returns, you need to first gauge the risk involved in your investment. Investments such as IPOs or stocks have a much higher risk quotient and the best you can do is predict a favourable return depending on the market. However, choosing low-risk options give you the freedom to forecast possible returns more accurately.

Tax bracket that applies to you

Knowing the tax slab you qualify for is crucial, as this will help you know your tax obligations in advance. This will allow you to choose investments that either offer you a tax benefit on the invested amount or tax exemptions on the interest earned. While some earnings are subject to TDS, others are not and while some incur the capital gains tax, others don’t. By accounting for the tax you are liable to, pay on your earnings, you can gauge your real ROI.

Investment costs

Keeping track of your investment cost is important as these costs reduce your total returns. While these costs may seem minimal, they are in fact not. A minimal 2% processing fee or investing fee quickly adds up just as compounding interest grows your wealth. These costs erode your invested sum to increase your investment cost and reduce the return.

The role of online calculators

When calculating investment returns, online calculators play an important role. Based on the investment type, these calculators show you the assured returns or potential gains on your chosen avenue. The two most popular calculators in this regard are the FD calculator and SIP calculator. Both of these serve different purposes as FDs mature via a fixed interest rate, while SIPs are subject to market fluctuations.

In this sense, let’s check how FD calculators can help you reduce your returns in advance. For example, say you were planning on investing Rs.25,000 in an FD for 3 years at 8.75% interest. Using an FD return Calculator, you will know that at maturity, your total would amount to Rs.32,153. When you do this before investing, you can choose to alter your investment’s tenor or principal or choose a different FD issuer and thereby meet your goals more efficiently.

If your goal is to earn assured returns in the future, it’s best to choose an investment that guarantees this. A fixed deposit is popular in this regard and one that offers the highest interest rates in India is the Bajaj Finance Fixed Deposit. Offering up to 9.10% interest rate for senior citizens and 8.75% for regular investors, the Bajaj Finance FD also has an affordable minimum investment amount of Rs.25,000. These factors, combined with the fact that this FD has the highest CRISIL and ICRA rating, makes it one of the best FDs in India. Apply online and begin investing today to secure your financial future.