Buzz
Bank interest rate calculation depends on various types of savings deposit services, where interest rate is understood as the percentage calculated from transactions between parties.
Bank Interest Calculation
In today's market, amidst various fluctuations in sectors like real estate, gold, and service businesses, many people opt for the safe solution of depositing savings to earn bank interest. Not only does this ensure the safety of their funds, but it also brings profits.
Each bank offers different forms of savings deposits with varying terms. Essentially, the method of calculating bank interest rates by term, month, and year is as follows:
1. Method of calculating bank interest rates by term
The method of calculating bank interest rates by term applies when you deposit savings and receive interest according to the agreed term with the bank, or if you withdraw savings prematurely:
The basic formula is as follows: Interest Earned = Principal Amount ×
Alternatively, you can use the formula: Interest Amount = Principal Amount × Interest Rate (% per year)/12 × Number of Months Deposited
Specific example: For instance, if you deposit 100 million VND in the bank for 12 months with an interest rate of 7.5%, the interest you receive at the end of the term will be: 100 million VND × 0.075/12 × 12 = 7,500,000 million VND.
See how to calculate percentage to better understand interest rate percentages within months and years.
Bank Interest Calculation Method
2. Monthly Bank Interest Calculation Method
Calculated using the following formula: Monthly Interest Amount = Principal Amount × Interest Rate (% per year) / 12
Specific example: If you deposit 100 million VND in the bank with an annual interest rate of 7%, then the monthly interest amount you receive will be calculated as: 100 million VND × 0.07/12 = 583,000 VND.
It's important to note that interest isn't compounded monthly. Instead, it accumulates until the end of the deposit term. When the term ends without withdrawal, the bank automatically renews it for a new term matching the previous one.
Additionally, withdrawing funds before the term ends, even by just a day, results in all your interest reverting to a non-term interest rate, typically yielding less than 1%.
Different banks have varying conventions for calculating the number of days in a year. On average, banks use either 360 or 365 days. Interest payment methods and terms also vary. Therefore, when choosing a savings account, consider the interest rate and related regulations.
Effective ways to calculate bank interest
Here's a guide from Free Download on How to Calculate Bank Interest by term, month, year, hoping to provide readers with important and helpful information. Alongside, Free Download also shares other relevant topics such as which bank offers the highest interest rates? Where to save money? These are topics of current interest, and Free Download has provided detailed suggestions for readers to refer to and follow.
The formula and method for calculating bank interest by term, month, year mentioned above apply to all deposit amounts, large to small, at various banks, including deposits of 500,000 trillion (about 21.7 billion USD). If you're unsure how much interest 500,000 trillion deposited in a bank will earn, the following article will help you estimate the monthly and yearly interest amounts for deposit terms of 1 month, 3 months, 6 months, and 1 year, aiding you in making the optimal savings deposit decision.
