Bank term and demand are two common deposit methods, and each of them has a different way of calculating interest. The following will introduce in detail the interest calculation methods of these two deposit methods, and ** the interest calculation method of regular transfer to current account.
1. Interest calculation of fixed deposits.
Fixed deposit refers to a deposit method in which the depositor deposits a certain amount of funds in the bank, agrees on the deposit period, and cannot withdraw it in advance during the deposit period. The interest on a fixed deposit is usually calculated in the form of simple interest or compound interest, and the specific calculation method is as follows:
1.Simple interest is calculated.
Simple interest refers to the calculation of interest on the principal amount and the interest rate, and the interest itself no longer generates interest. Simple interest is calculated as follows:
Interest = Principal Interest Rate Deposit Term.
Among them, the principal refers to the amount of funds deposited by the depositor, the interest rate is the annual interest rate given by the bank, and the deposit term is the deposit time agreed between the depositor and the bank.
2.How compound interest is calculated.
Compound interest means that the interest is not only calculated on the principal basis, but also adds the previously accrued interest to the principal and calculates the interest again. The formula for calculating compound interest is:
Interest = Principal 1 + Interest Rate) Deposit Term - Principal.
Or it can be calculated on a period-by-period basis, and the interest of the next period will be calculated after the principal is added to the interest of each period.
2. Calculation of interest on demand deposits.
Demand deposit refers to a deposit method in which depositors can withdraw funds at any time and are not limited by the deposit period. The interest calculation of demand deposits is usually based on daily interest calculation and deposit and withdrawal, and the calculation method is as follows:
Interest = Principal Daily Interest Rate Number of days of deposit.
Among them, the daily interest rate is the bank's given annual interest rate divided by 360 (or 365, depending on the bank's regulations), and the number of deposit days is the number of days the depositor actually deposits.
3. Calculation of interest on regular transfer.
If the depositor needs to withdraw funds in advance during the term of the fixed deposit, the fixed deposit can be converted into a demand deposit. In this case, the bank will calculate the interest according to the time point when the depositor withdraws in advance, according to the interest calculation rules of the demand deposit.
Under normal circumstances, when a fixed deposit is converted into a demand deposit, the bank will calculate the interest on the fixed part according to the interest rate of the original time deposit and the actual deposit period, and calculate the interest on the remaining funds according to the interest rate of the demand deposit from the date of early withdrawal.
4. Precautions.
When depositing, depositors should fully understand the bank's interest calculation rules and choose the appropriate deposit method according to their own capital needs and expected returns. At the same time, depositors should also pay attention to the following:
1.Early withdrawal of a fixed deposit during the term of the deposit will result in the loss of part of the interest income, so early withdrawal should be avoided as much as possible.
2.Although demand deposits can be withdrawn at any time, the interest rate is relatively low, making them not suitable for long-term deposits.
3.Different banks may have different interest calculation rules and interest rates, and depositors should compare multiple banks to choose the most suitable deposit method.
In short, understanding the interest calculation method of bank fixed and demand deposits, as well as the interest calculation method of fixed to current deposits, can help depositors better plan their funds and maximize returns.
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