How are fixed deposit rates calculated in leap years? Here’s how banks handle the extra day. Business
Bank of Baroda
ET noted that, for household word On deposits lasting more than one year, if the last quarter is incomplete, Bank of Baroda calculates interest for the complete quarter and actual days considering the year as 365/366 days. Interest is compounded quarterly for completed quarters, while interest is compounded on incomplete terminal quarters. Proportional interest for actual days.
Here are some key points of Bank of Baroda interest calculation
For deposits of 2 quarters and above
- Interest is calculated quarterly for completed quarters.
- In case of incomplete terminal quarter, interest is calculated proportionately based on the actual number of days, considering the year as 365/366 days.
Calculation of Maturity Amount
- The maturity amount mentioned in the receipt is calculated without considering
tds Effect. - While calculating the interest for a half-year (quarterly compounded), the interest of the previous half-year (quarterly compounded), less TDS, is added to it.
Principal amount For calculation of interest for the current half year.
For small deposits of less than 2 quarters but more than 1 quarter
- Simple interest is paid for the entire quarter.
- Considering the year as 365-366 days, additional interest is provided for the remaining days without charging compound interest.
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For small deposits of less than one quarter
Interest is calculated proportionately based on the actual number of days, assuming a year of 365-366 days.
Jana Small Finance Bank
Jana Small Finance Bank calculates its interest based on the actual number of days in a year, using 365 days for non-leap years and 366 days for leap years. The deposit period is calculated based on the number of days.
AU Small Finance Bank
AU Small Finance Bank’s interest calculation involves considering the actual number of months and days in a year. In cases where the deposit is in both leap and non-leap years, interest is calculated based on the respective number of days (366 for leap years and 365 for non-leap years).
IDFC First Bank
IDFC First Bank rounds the interest to the nearest rupee and calculates it on the basis of 365 days for fixed deposits in non-leap years and 366 days in leap years.
HDFC bank
HDFC Bank calculates interest considering the actual number of days in a year. If the fixed deposit is spread over both leap and non-leap years, the interest is calculated based on the specific number of days of each year (366 days for leap years and 365 days for non-leap years).
