Regarding Bank FD interest calculation

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Chupita (Querist)
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14 September 2010 Please guide me for Bank FDR interest calculation. I want to verify the return amount of FD but i am not able to get exact amount which is written on FD Receipt
Principal amount - 1500000
FD Interest rate - 9%
for period - 1 year & 11 months

Maturity amount - 1779100.64
Please guide me formula so i can check for other FDR receipt also.

Praveen Bajaj

Praveen Bajaj (Expert)
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15 September 2010 Falguni,

Generally Banks calculate interest on FD on a compounding basis. Frequency of compounding is different for different FD products. In your case interest is compounded quarterly. Please see the table below

Period Amount(Begin) Int rate Amount(end)
Qtr 1 1500000 2.25% 1533750
Qtr 2 1533750 2.25% 1568259
Qtr 3 1568259 2.25% 1603545
Qtr 4 1603545 2.25% 1639625
Qtr 5 1639625 2.25% 1676517
Qtr 6 1676517 2.25% 1714238
Qtr 7 1714238 2.25% 1752809
2 mos 1752809 1.50% 1779101

Excuse me for the mis-alligned table.

Interest rate above is for the quarter (i.e 9%/4). Through Simple excel calculation you can reproduce this table. Please get back in case its not clear.

Chupita

Chupita (Querist)
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16 September 2010 Thank you Mr. Bajaj. Thank you for your kind guidance. It will definitely help me for my work.

Falguni

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