How to Calculate Savings Account Interest
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Depending on the institution where you have saved your money, banks often calculate savings interest using the following approaches:
- Daily interest – In this case, the banks will use your daily closing balance to calculate the interest for that particular day and save the interest amount in a separate account.
- Monthly interest – The bank calculates the monthly interest using the average daily balance for the month or the lowest/minimum amount in that month.
Once a bank determines your interest and stores the amount in a temporary account, the interest amount is posted in your account either monthly, quarterly, semi-annually, or annually.
The steps for calculating savings interest for customers can be quite tedious, however, the Franktek Microsystems software performs all those tasks automatically. Talk to us today for a quote.