How to calculate bank savings interest: 3 tips for calculating monthly interest.

You deposit savings but are still unclear about how bank interest is calculated , how much profit you earn each month, and why the final amount differs from a simple multiplication? In reality, most banks apply compound interest , meaning interest is added to the principal and continues to generate interest on a monthly basis. This article will guide you on how to calculate bank savings interest in a simple, practical way, helping you estimate your earnings, compare different savings packages, and make smarter deposit decisions. No complicated formulas are needed – simply understanding the fundamentals will give you an advantage.

Things to know when calculating bank savings interest rates.

Understand the compound interest formula before you begin.

• Interest rates on savings accounts at banks are usually calculated using compound interest , meaning the interest is added to the principal after each period.

• This basic formula helps you accurately estimate the amount of money you will receive in the future.

• Before calculating, fully identify the important variables such as:

  • Initial deposit amount

  • Savings interest rate (%/year)

  • Deposit term and interest payment frequency (monthly, quarterly)

  • Actual delivery time

• Once sufficient data is available, applying the formula will be faster and minimize errors.

Calculate interest when depositing savings regularly every month.

• If you deposit money regularly, use the formula for the cumulative value of regular savings .

• Effective method:

  • Determine the deposit amount for each period.

  • Determine the savings interest rate and interest calculation period.

  • Calculate the total savings after the entire deposit period.

• This method accurately reflects the reality of monthly savings packages, helping you compare and choose the right product.

Use a spreadsheet to calculate interest quickly and accurately.

• Spreadsheets like Excel or Google Sheets are very suitable tools for calculating bank savings interest rates .

• Basic steps:

  • Create a table and clearly enter each variable: deposit amount, interest rate, time period, and cycle.

  • Set up a compound interest or periodic interest formula.

  • Use built-in financial functions to reduce errors.

• This method is especially useful when you want to compare different savings options over a short period.

Tip 1: How to accurately calculate compound interest on bank savings.

Step 1: Understand and apply the compound interest formula when calculating savings interest rates.

The basic compound interest formula to remember.

• The formula for calculating the amount of money saved after a period of time with compound interest is:
  A = P × (1 + r/n)^(n×t)

• This is the standard formula used by banks and financial institutions to calculate interest rates on bank savings accounts using compound interest .

Explain each variable in the formula clearly.

• P (Principal) : the initial amount of money you deposit into the bank.

• r (Rate) : Annual savings interest rate, calculated as a decimal (e.g., 6% = 0.06).

• n : the number of times the bank deposits interest in a year (12 times if deposited monthly, 4 times if deposited quarterly).

• t (Time) : the time period for depositing money, measured in years.

• A (Amount) : The total amount you receive at the end of the term, including both principal and interest.

Determine the correct sending time (t) to avoid discrepancies.

• The time period in the formula must match the interest rate being used .

• Common conversion methods:

  • Monthly payment: divide the total number of months by 12.

  • By date: divide the total number of days by 365.

• Example: sending for 6 months → t = 6/12 = 0.5 years

How to apply the formula to real-life savings deposits.

• Make sure you have all four pieces of information: principal amount, interest rate, interest payment cycle, and deposit term.

• Substitute the values ​​into the formula one by one.

• Calculate the final amount to:

  • Compare different savings packages.

  • Estimate profit before deposit

  • Proactively plan your personal finances.

Step 2: Identify the correct variables before calculating savings interest.

Check the information from your savings account or bank.

• Before applying the compound interest formula, you need to accurately identify the variables according to the terms of your savings account .

• The most practical way:

  • View your contract/savings passbook.

  • Check on the bank's website.

  • Ask the consultant directly to avoid confusion regarding interest rates and compounding cycles.

P – Principal amount

• To be:

  • The initial amount you deposited, or

  • The current balance if you are calculating interest on an existing savings account.

• This is the basis on which the bank calculates all accrued interest.

r – Savings interest rate

• It must be converted to decimal form before being used in a formula.

• The conversion method is very simple:

  • Interest rate 3% → r = 0.03

  • Interest rate 6.5% → r = 0.065

• Simply take the published interest rate and divide it by 100.

n – Number of times interest is paid in a year

• This represents the frequency with which a bank adds interest to the principal .

• Common cases:

  • Enter monthly interest: n = 12

  • Quarterly interest input: n = 4

  • Annual interest input: n = 1

• Some specific savings products may have different terms, so it's important to check the terms carefully.

Step 3: Substitute the numbers into the formula to calculate the savings interest rate.

Incorporate the identified variables into the compound interest formula.

• Once you have all the information for P, r, n, and t , simply substitute it directly into the compound interest formula to calculate the total amount received at the end of the period.

• Formula to apply:
  A = P × (1 + r/n)^(n×t)

• Result A shows the total amount of money you have, including both principal and interest.

An easy-to-understand example.

• Let's assume you have:

  • P = 1,000,000 VND (principal)

  • r = 0.05 (equivalent to an interest rate of 5% per year)

  • n = 4 (the bank deposits interest quarterly)

  • t = 1 year

• Then the calculation would be:

  • A = 1,000,000 × (1 + 0.05/4)^(4×1)

• The result shows the amount of money you will save after one year when applying compound interest to your bank savings account .

Case of daily interest entry

• The calculation method is exactly the same, the only difference is the value of n .

• If the bank deposits interest daily:

  • Substitute n = 365 into the formula.

• This helps to more accurately reflect savings products with a high frequency of interest payments.

Practical considerations when applying

• Always carefully check the interest accrual cycle in your savings contract.

• Do not confuse the quoted interest rate with how banks calculate actual interest.

• Substituting numbers and doing the calculations beforehand helps you:

  • Accurately estimate interest

  • Compare different savings packages.

  • Proactive decision-making leads to more effective money transfers.

Step 4: Perform the calculation to find the savings interest rate.

Start by simplifying the simpler parts of the recipe.

• Once you've substituted all the numbers into the compound interest formula, the next step is to process each part to avoid confusion .

• Follow these steps in order:

  • Divide the annual interest rate by the number of times interest is compounded.

    • 0.05 ÷ 4 = 0.0125

  • Multiply the number of interest payments by the deposit period.

    • 4 × 1 = 4

Rewrite the formula after simplifying it.

• At this point, the formula becomes:

  • A = 1,000,000 × (1 + 0.0125)^4

• This is a simplified formula, very easy to continue calculating by hand or calculator.

Continue processing the part in parentheses.

• Add the values ​​in parentheses first:

  • 1 + 0.0125 = 1.0125

• The formula now is:

  • A = 1,000,000 × (1.0125)^4

The practical significance of this step

• Simplifying the steps will help you:

  • Understanding how bank savings interest is compounded

  • Avoid errors when calculating manually.

  • The results can be easily verified by comparing them with spreadsheets or online tools.

Step 5: Solve the equation to find the actual interest received.

Calculating powers in the compound interest formula

• After obtaining the expression A = 1,000,000 × (1.0125)⁴, the next step is to calculate the power .

• In simple terms:

  • 1.0125 × 1.0125 × 1.0125 × 1.0125

• The result is approximately 1,051 .

Complete the calculation of the final amount.

• Substitute the calculated result into the formula:

  • A = 1,000,000 × 1.051

• The amount saved after 1 year is:

  • A = 1,051,000 VND

Compare this to simple interest calculation to understand the difference.

• If we only consider simple interest at 5%:

  • 1,000,000 × 5% = 50,000 VND

• Meanwhile, quarterly compound interest yields:

  • 51,000 VND

• The difference may be small in a year, but it will increase very quickly if you deposit it for the long term .

Determine the actual interest received.

• Interest calculation formula:

  • Interest = A − P

• Let's apply this to an example:

  • 1,051,000 - 1,000,000 = 51,000 VND

Important lessons when depositing money in a bank savings account.

• The quoted interest rate does not fully reflect the actual profit.

• The more frequent the interest accrual cycle, the more pronounced the compound interest effect.

• Understanding how bank savings interest rates are calculated correctly will help you:

  • Accurately estimate the amount of money received.

  • Compare the more cost-effective savings packages.

  • Actively choose the optimal term and deposit method.

Tip 2: How to calculate interest on savings when making additional monthly deposits.

Step 1: Calculate the interest rate on savings deposits made monthly.

Use the formula for the cumulative value of recurring savings.

• When you deposit additional money into your savings account each month , the interest is calculated differently compared to depositing it all at once.

• The complete formula for calculating the total amount at the end of the period is:

  • A = P × (1 + r/n)^(n×t) + PMT × [(1 + r/n)^(n×t) − 1] / (r/n)

• This formula accurately reflects the reality of monthly savings packages at banks .

Quickly understand the meaning of each part in the formula.

• P : the initial principal amount deposited in one lump sum.

• PMT : the amount you deposit periodically (usually monthly).

• r : annual savings interest rate (decimal form)

• n : number of times interest is paid in a year

• t : time of submission (in years)

• A : Total amount received at the end of the period, including principal and interest.

The calculation method is easy to understand: separate each part.

• To avoid confusion, it's best to do it in two steps:

  1. Calculate interest on the original principal amount (P)

     • Apply the standard compound interest formula.

  2. Calculate interest on the monthly installments of your deposit (PMT).

     • This section reflects the cumulative effect of making regular deposits.

• Then add the two results together to get the total amount saved.

Flexible application based on interest accrual cycle.

• This formula can be used in many situations:

  • Daily interest calculation

  • Enter monthly interest

  • Quarterly interest income

• Simply replace the value of n with the correct value as per the bank's terms.

Why is this method of calculation so important?

• Suitable for people who have a habit of saving money every month.

• To help you:

  • Accurately estimate the amount of money you will accumulate in the future.

  • Comparing the effectiveness of different recurring savings packages.

  • Develop a clearer long-term financial plan.

Step 2: Calculate interest on your monthly deposit (PMT).

Apply the second part of the cumulative formula.

• When you make regular monthly deposits , the interest generated from these deposits is calculated separately using the second part of the formula .

• In the formula, PMT is the amount of money you regularly deposit each month .

A simple explanation for easy application.

• Each PMT investment plan does not have the same interest-bearing period:

  • Early deposits will earn interest for a longer period.

  • Late deposits will earn less interest.

• This formula automatically applies the compound interest effect to all monthly deposits.

Practical and easy-to-follow calculation steps.

• Clearly define:

  • PMT: monthly deposit amount

  • r: annual savings interest rate (decimal form)

  • n: number of times interest is paid in a year

  • t: total delivery time (in years)

• Replace these values ​​in the PMT part of the formula.

• The results show:

  • Total accumulated value from monthly deposits

  • This includes both the principal amount deposited and the accrued interest.

Why is it necessary to calculate the PMT portion separately?

• Suitable for monthly savings deposits and cumulative savings plans.

• To help you:

  • Accurately estimate your future savings.

  • The benefits of sending money regularly are clear, instead of waiting until you have a large sum to send it.

  • Proactively adjust your PMT level to achieve your financial goals faster.

Step 3: Identify all variables before calculating savings interest.

Gather information from savings accounts or contracts.

• Before calculating bank savings interest , you need to check your savings passbook, investment contract, or ask the bank directly to obtain all the necessary variables.

• The important variables include: P, r, n, t, PMT, and A. Missing any of these variables will result in inaccurate calculations.

P – The principal amount used to calculate interest

• To be:

  • The account balance at the time you start calculating interest, or

  • The initial principal amount if you are a new depositor.

• This is the basis on which the bank calculates all accrued interest.

r – Annual savings interest rate

• It represents the amount of interest the bank pays each year.

• It is mandatory to convert to decimal form when entering it into a formula:

  • 3% → 0.03

  • 6.8% → 0.068

• The conversion method is very simple: divide the listed interest rate by 100.

n – Number of times interest is paid in a year

• Indicate the frequency with which interest is added to the principal .

• Common values:

  • Daily interest input: n = 365

  • Enter monthly interest: n = 12

  • Quarterly interest input: n = 4

• It is necessary to check the correct cycle because n directly affects the actual interest received.

t – Interest calculation period

• Show the number of years or part of a year you deposited the money.

• Common conversion methods:

  • 1 year → t = 1

  • 6 months → t = 0.5

  • 1 month → t = 1/12 ≈ 0.0833

PMT – Monthly Additional Deposit Amount

• Applicable to recurring savings deposit options.

• It's the amount of money you regularly deposit into your account each month.

A – Ending account value

• This is the total amount of money you have after the deposit period , including:

  • The entire principal amount

  • Recurring deposits (if any)

  • All accrued interest

Step 4: Substitute the values ​​into the formula to calculate the equal monthly savings deposit.

Include all variables in the cumulative formula.

• Once you have determined the variables P, r, n, t, and PMT , you can simply substitute them directly into the formula to calculate the bank savings interest rate in the case where you have both the initial principal and additional monthly deposits.

• The formula to apply is:

  • A = P × (1 + r/n)^(n×t) + PMT × [(1 + r/n)^(n×t) − 1] / (r/n)

Specific and realistic examples to illustrate the point.

• Let's assume you have:

  • P = 1,000,000 VND (initial principal)

  • r = 0.05 (interest rate 5%/year)

  • n = 12 (enter monthly interest)

  • t = 3 years

  • PMT = 100,000 VND/month

• Then the expression will be:

  • A = 1,000,000 × (1 + 0.05/12)^(12×3)

  • • 100,000 × [(1 + 0.05/12)^(12×3) − 1] / (0.05/12)

A quick way to understand and avoid getting confused by formulas.

• Part one of the formula:

  • Calculate compound interest on the initial principal (P) over 3 years.

• The second part of the formula:

  • Calculate the cumulative value of monthly equal deposits (PMT).

• The sum of the two main parts is the end-of-term savings account value (A) .

The benefits of substituting numbers before calculating.

• To help you:

  • Accurately estimate the amount of money accumulated over many years.

  • Easily verifiable using a computer or Excel spreadsheet.

  • Comparing the effectiveness of different monthly deposit levels.

• Particularly useful for savings products such as cumulative savings and installment savings .

Step 5: Simplify the formula before calculating interest on regular savings deposits.

Simplify the r/n part in the formula.

• The first step is to process r/n to make the calculations easier.

• With the example under consideration:

  • r = 0.05

  • n = 12

• Then:

  • r/n = 0.05 ÷ 12 ≈ 0.00417

Rewrite the formula after simplifying r/n.

• After replacing the divisor, the formula becomes:

  • A = 1,000,000 × (1 + 0.00417)^(12×3)

  • • 100,000 × [(1 + 0.00417)^(12×3) − 1] / 0.00417

Continue simplifying the part in parentheses.

• Add 1 to the periodic interest rate:

  • 1 + 0.00417 = 1.00417

• Now, the formula is simpler and easier to calculate:

  • A = 1,000,000 × (1.00417)^(12×3)

  • • 100,000 × [(1.00417)^(12×3) − 1] / 0.00417

The significance of this reduction step.

• To help you:

  • Avoid confusion when calculating powers multiple times.

  • It's easy to import formulas into a calculator or Excel.

  • Understanding how bank savings interest is distributed monthly.

Step 6: Solve the exponent to continue calculating interest on the regular savings deposit.

Calculate the value in the exponent (n × t)

• First, let's deal with the simplest part of the exponent:

  • n = 12 (enter monthly interest)

  • t = 3 years

• Then:

  • n × t = 12 × 3 = 36

Use exponents to simplify the formula.

• After obtaining the exponent 36, proceed with the calculation:

  • (1.00417)³⁶ ≈ 1.1616

• The formula is now simplified to:

  • A = 1,000,000 × 1.1616

  • • 100,000 × (1.1616 − 1) / 0.00417

Continue simplifying the part in parentheses.

• Perform the subtraction:

  • 1.1616 − 1 = 0.1616

• Then the expression becomes:

  • A = 1,000,000 × 1.1616

  • • 100,000 × 0.1616 / 0.00417

The practical significance of this step

• This is a crucial stage that will help you:

  • The effect of compound interest becomes clearly visible on a monthly basis after many years.

  • Understanding why regular monthly deposits generate greater accumulated value than you might imagine.

  • Prepare the formula in its simplest form before multiplying and dividing to get the final result.

Step 7: Complete the calculation to determine the ending balance of your savings account.

Calculate the value from the original principal amount.

• The first part of the formula is the compound interest of the principal P.

• With the shortened result:

  • 1,000 × 1.1616 = 1,161.6

• This is the value of the principal amount after 3 years, when applying the bank's monthly compounded savings interest rate .

Calculate the value derived from monthly installments (PMT).

• Start by dividing the numerator by the denominator:

  • 0.1616 ÷ 0.00417 ≈ 38.753

• Then multiply by the monthly deposit amount:

  • 38,753 × 100 = 3,875.30

• This is the total accumulated value of monthly savings deposits over the entire deposit period.

Add the two parts to get the closing account value.

• Total account value:

  • A = 1,161.6 + 3,875.30

  • A = 5,036.9

The conclusion is easy to understand for savers.

• With:

  • 1,000 initial principal

  • Send an additional 100 each month.

  • Interest rate 5% per year

  • Enter monthly interest for 3 years.

• Your balance at the end of the period is 5,036.9 .

Step 8: Calculate the total net interest earned from the savings account.

Understanding how to properly determine actual interest

• When depositing money into a savings account , which includes both the initial principal and additional monthly deposits , the interest earned is not the entire balance at the end of the term.

• The actual interest received is determined by:

  • Get the ending account value (A)

  • Subtract the original principal amount (P)

  • Subtract the total amount of money already deposited periodically.

Formula for calculating net interest earned

• Interest = A − P − (PMT × n × t)

Apply this to a specific example.

• Ending account value:

  • A = 5,036.9

• Initial principal amount:

  • P = 1,000

• Total additional monthly deposit:

  • PMT × n × t = 100 × 12 × 3 = 3,600

Perform the final calculation.

• Net interest received:

  • 5,036.9 − 1,000 − 3,600 = 436.81

The significance of this number for savers.

• 436.81 is the total interest you earned after 3 years.

• This figure accurately reflects the effectiveness of:

  • Bank savings interest rates

  • Regular monthly deposits

• Thanks to this calculation method, you can:

  • Knowing exactly how much profit you've made.

  • Comparing different savings options

  • Adjust the deposit amount and time to optimize profits.

Tip 3: How to quickly calculate compound interest using Excel

Step 1: Use a spreadsheet to calculate your savings interest rate quickly and accurately.

Open a new spreadsheet.

• You can use Excel , Google Sheets , or similar spreadsheet software.

• This is a very effective way to calculate bank savings interest , especially for long-term deposits or deposits made monthly.

Why should you use a spreadsheet instead of doing calculations by hand?

• Help:

  • Save time on calculations.

  • Minimize errors when handling exponents and compound interest.

  • Easily adjust interest rates, terms, or deposit amounts to compare multiple options.

• Suitable for both beginners and those already familiar with personal finance management.

Utilize available financial functions.

• Excel and Google Sheets have many financial functions that support compound interest calculation , saving you the need to memorize long formulas.

• Simply enter:

  • Principal

  • Interest rate

  • Interest accrual cycle

  • Shipping time

  • Additional monthly deposit amount (if any)

• The results will be calculated automatically and accurately.

Practical benefits of application

• Easily track your savings growth month by month, year by year.

• Quick comparison of different bank savings plans

• Proactively adjust your deposit plan to achieve your financial goals sooner.

Step 2: Clearly label the variables in the spreadsheet.

Organize the data from the start to make calculating interest easier.

• When using a spreadsheet to calculate bank savings interest rates , clear labeling helps you:

  • Avoid confusing the numbers.

  • Easy to check and modify when assumptions change.

  • Track the results visually.

Variables should be fully labeled.

• Start by dedicating a column (or a separate area) to clearly state:

  • Interest rate (r)

  • Initial principal (P)

  • Delivery time (t)

  • Number of times interest is paid per year (n)

  • Monthly Deposit Amount (PMT)

• Each variable should be placed in a separate cell, with a clear name for easy reference in formulas.

Presentation tips to make spreadsheets easier to use.

• Note the unit name right next to it:

  • %/year, month, year, VND

• Use a consistent format for amounts and percentages.

• You can use bold or light colors to distinguish between the data input cell and the result cell.

Practical benefits of variable labeling

• The spreadsheet is easily reusable for various savings scenarios.

• Simply change the numbers, and the savings interest result will automatically update.

• It helps you control and optimize your long-term savings plan scientifically.

Step 3: Enter data for each variable in the spreadsheet.

Fill in your account information in the column next to it.

• After labeling the variables, enter the actual savings account data in the adjacent column.

• This method helps the spreadsheet:

  • Easy to read

  • Easy to check

  • Avoid confusing variable names with values.

All data must be entered completely.

• Fill in the blanks in order:

  • Savings interest rate (%/year)

  • Initial principal amount

  • Shipping time

  • Interest accrual cycle (monthly, quarterly, annually)

  • Additional monthly deposit amount (if any)

• You should use the correct number format for the formula to work accurately.

Why should you separate the data input fields?

• To help you:

  • Easily change interest rates, terms, or deposit amounts.

  • A quick comparison of various bank savings scenarios.

  • See the impact of each variable on the final interest income.

• Particularly useful when planning long-term savings.

Tips for making spreadsheets more flexible

• Do not merge formulas into data entry cells.

• The table can be copied to create multiple different options.

• Give the table an easy-to-remember name so you can reuse it later.

Step 4: Create a formula to calculate savings interest in the spreadsheet.

Choose the formula that best suits your deposit method.

• Depending on how you save, choose one of these two formulas :

  • Send once, no more : use the basic compound interest formula.

    • A = P × (1 + r/n)^(n×t)

  • Send additional money regularly every month : use the expanded formula with PMT

    • A = P × (1 + r/n)^(n×t) + PMT × [(1 + r/n)^(n×t) − 1] / (r/n)

Enter the formula in a blank cell.

• Select any cell in the spreadsheet to display the results.

• Start formulas with the equals sign (=) as per Excel or Google Sheets conventions.

• Use parentheses to ensure the correct order of operations.

Replace the variable with the corresponding data cell.

• Do not directly enter the symbols P, r, n, t, PMT.

• Instead:

  • Type the address of the cell containing the value (e.g., B2, B3…), or

  • Click directly on the cell containing the data while entering a formula.

• This method helps:

  • The formula updates automatically when you change the data.

  • Avoid having to re-enter the entire calculation.

Examples of how to enter formulas in a spreadsheet.

• If:

  • P is located in cell B2

  • r in cell B3

  • n in cell B4

  • t in cell B5

  • PMT is in cell B6

• The formula will be entered using a similar structure, the only difference being that it uses cell addresses instead of variables .

Practical benefits of this step

• To help you:

  • Calculate bank savings interest rates automatically and accurately.

  • Try different money transfer scenarios just by changing your number.

  • Comparing the effectiveness of a one-time deposit versus monthly installments.

• Particularly useful when planning medium- and long-term savings.

Step 5: Use financial functions to calculate savings interest faster.

Use the FV (Future Value) function in Excel or Google Sheets.

• The FV function calculates the future value of an account based on the interest rate, time period, and periodic contribution amount.

• Quick way to open:

  • Select an empty cell

  • Type =FV(

  • A guide will appear to help you fill in the correct parameters.

Important note regarding the negative sign of the result.

• The FV function is designed for debt repayments , so the result usually shows a negative number .

• How to handle it:

  • Add -1 * in front of the formula

  • Example: =-1*FV(

Explain each parameter in the FV function.

• rate : interest rate per period

  • Enter r/n (annual interest rate divided by the number of periods in the year)

• nper : total number of periods

  • Calculated using n × t

  • If you deposit money monthly for 5 years → nper = 12 × 5 = 60

• PMT : Periodic deposit amount per period

  • If you send monthly, this is the amount per month.

• pv (Present Value) : the initial principal amount of the account.

• type : can be left blank (default = 0)

Here's an example of a complete and easy-to-apply FV formula.

• Suppose:

  • Annual interest rate of 5%

  • Enter monthly interest

  • Send an additional 100 each month.

  • Initial principal amount: 5,000

  • 12-month period

• Formula to be entered into the cell:

  • =-1*FV(0.05/12, 12, 100, 5000)

• The results show that the account value after 1 year is 6,483.70 .

Why should you use the FV function when calculating bank savings interest rates?

• No need to manually handle the long-term compound interest formula.

• Reduce errors when calculating exponents and submit them periodically.

• It's easy to change interest rates, terms, and deposit amounts to compare various scenarios.

• Suitable for medium- and long-term savings planning.

Calculate the interest rate on savings deposits that are not regular.

In the case of sending money without a fixed schedule.

• If you deposit money into your savings account on a non-regular monthly basis , calculating interest will be more complicated than with regular deposits.

• The appropriate method of calculation is:

  • Calculate interest separately for each deposit.

  • Each investment will have a different interest-bearing period.

  • Apply the same compound interest formula to each amount, then add them together.

• This method accurately reflects reality but requires meticulous calculation .

Practical solution: use spreadsheets to reduce errors.

• Spreadsheets like Excel or Google Sheets are the most effective options:

  • Each line represents a deposit.

  • Calculate interest for each amount based on the remaining time.

  • Automatically calculates the total principal and interest.

• This method allows you to precisely control your bank savings interest rate in flexible deposit situations.

Use a free online interest calculator.

• If you don't want to create a spreadsheet yourself, you can use online tools.

• Just search:

  • “annual percentage yield calculator”, or

  • “annual percentage rate calculator”

• These tools allow:

  • Enter interest rate

  • Shipping time

  • Interest accrual cycle

  • Some also support regular or irregular deposits.

When should you use online tools?

• Want to quickly estimate interest?

• Multiple savings scenarios need to be compared.

• Not familiar with Excel or financial formulas.

Important notes when applying

• The results from the online tool are only accurate if you enter the information correctly:

  • Interest rate

  • Interest accrual cycle

  • Shipping time

• For large or long-term savings, it's advisable to cross-check the figures using a spreadsheet to ensure accuracy.

References

1. https://qrc.depaul.edu/StudyGuide2009/Notes/
   Savings%20Accounts/Compound%20Interest.htm
2. https://www.mymoneyblog.com/interest_compou.html
3. http://www.thecalculatorsite.com/articles/
   finance/compound-interest-formula.php
4. https://support.office.com/en-us/article/
   FV-function-2eef9f44-a084-4c61-bdd8-4fe4bb1b71b3

Translated by: Sidney Bailey Hoang .