Bank Deposit Interest Calculator
Calculate interest returns on fixed-term deposits with options for maturity vs. monthly payouts. Supports Actual/360 and Actual/365 day count conventions.
About
When locking capital into a fixed-term deposit, the difference between quoted rates and actual returns often lies in the "Day Count Convention." Banks differ in how they define a year - some use 360 days (common in commercial markets) while others use 365 days (common in retail banking). This discrepancy can alter the final interest payout by a measurable margin on large sums.
This tool compares two liquidity scenarios: waiting for a lump sum at maturity versus taking monthly income. For retirees or income-focused investors, understanding the cash flow difference is vital. Monthly payouts often result in a slightly lower effective yield if not reinvested, as you lose the compounding effect within the term (though most standard fixed deposits pay simple interest).
Formulas
The calculation uses the standard Simple Interest formula adjusted for the day count fraction F.
Total Interest I:
I = P × r × F
Where F depends on the convention:
For monthly payouts, the annual interest is simply divided by 12, assuming a standard calendar year distribution.
Reference Data
| Convention | Formula | Typical Usage |
|---|---|---|
| Actual/360 | D360 | US Money Markets, Commercial Loans |
| Actual/365 | D365 | UK, Singapore, Retail Deposits |
| 30/360 | 30 × M360 | Corporate Bonds, US Agency Bonds |
| Actual/Actual | Exact Days | Treasury Bonds |