Savings Certificate Calculator
What a lump sum in a savings certificate returns at maturity.
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Formula
How the calculation works
A certificate pays a fixed profit on a lump sum, and the profit is credited every three months rather than kept aside. That means each quarter's profit is added to the balance and then earns in the following quarter, which is why the exponent counts quarters and not years.
The gap between simple and compound here is not small over a long term. On 100,000 at 11.83% for five years, simple interest would give about 59,150, while quarterly compounding gives 79,126 -- nearly 20,000 more, and the difference keeps widening with the term.
Common mistakes
- Using the annual rate as if it were paid once at the end. The published rate is already the annual figure; the tool applies it a quarter at a time.
- Treating a rate quoted in one year as still current in another. These rates are revised by policy, so the number to trust is the one on the certificate you are actually buying.
When to use it
- Use it to compare what a certificate returns against an FDR or a plain deposit at the rates you are actually offered.
- It assumes the certificate is held to maturity; encashing early usually applies a lower rate and often a penalty, so the result here does not apply.
Worked example
100,000 in a certificate at 11.83% for 5 years: 179,126.47 at maturity, profit 79,126.47.
Common questions
Is the profit added every three months?
Yes, the calculation compounds quarterly: each quarter's profit is added and then earns in the next quarter.
Where does the rate come from?
You enter it, because these rates are revised from time to time. Nothing is hard-coded, so the page cannot show a stale rate.
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