Values for 'FD portfolio,' 'Current return,' 'Current value,' and 'Total Interest' are approximate numbers since we are calculating them ourselves using certain logics followed by the industry. However, in reality, not all banks follow the same logic, and hence there may be differences. A few scenarios that may cause differences are as follows:
Compounding of Interest
Banks compound interest at a given frequency, and each bank sets its own frequency. The frequency could be daily, monthly, quarterly, annually, etc. The smaller the frequency, the better it is for the customer.
Example: If a bank compounds quarterly, in that case, the interest for Q2 will be paid on the principal amount + interest accumulated in Q1 and so on.
Since different banks follow different rules, we have used the Simple Interest formula to derive interest values.
Variance in the number of days
In case the interest payment date clashes with a bank holiday, the bank will credit the interest on the next banking day, and different banks handle it differently.
Example: Banks' FDs will calculate interest on the invested amount for the holiday period, whereas NBFCs will calculate interest on the accumulated amount.
TDS (Tax deducted at source)
Banks pay interest post-TDS adjustments based on certain criteria. The TDS will vary for each customer based on the interest they receive each financial year. However, there are ways to bypass TDS. Learn more about TDS
First Interest payment within 30 days of FD start date:
In the case of NBFC FDs, if the first interest payment is within 30 days of the FD start date, the NBFC will skip the interest payment and adjust the amount on the 2nd interest payment date.