Comments on: Don’t Get Confused With Bank FD Calculation http://imdavidlee.com/bank-fd-calculation/ Ideas For Financial Freedom Tue, 06 Jan 2009 06:09:00 +0000 http://wordpress.org/?v=2.6.1 By: Jun http://imdavidlee.com/bank-fd-calculation/#comment-1353 Jun Wed, 26 Nov 2008 05:22:06 +0000 http://imdavidlee.com/?p=156#comment-1353 im kind of confused here...now the rate for 2 month FD is 3%. wat if i place RM1000 for 2 months FD..wat would be the total interest i received after 2? im kind of confused here…now the rate for 2 month FD is 3%. wat if i place RM1000 for 2 months FD..wat would be the total interest i received after 2?

]]> By: saioyu http://imdavidlee.com/bank-fd-calculation/#comment-408 saioyu Sat, 07 Jun 2008 01:08:50 +0000 http://imdavidlee.com/?p=156#comment-408 now FD rate quite low if compared to last time now FD rate quite low if compared to last time

]]> By: mutualism http://imdavidlee.com/bank-fd-calculation/#comment-401 mutualism Tue, 03 Jun 2008 12:42:05 +0000 http://imdavidlee.com/?p=156#comment-401 [...] is strictly for savings purposes. But, how do we count the total gain from fixed deposit for a year?http://imdavidlee.com/bank-fd-calculation/New MutualismNew mutualism seeks modern ways of expressing the fundamentals values of mutual and [...] [...] is strictly for savings purposes. But, how do we count the total gain from fixed deposit for a year?http://imdavidlee.com/bank-fd-calculation/New MutualismNew mutualism seeks modern ways of expressing the fundamentals values of mutual and [...]

]]> By: InvestorIndia http://imdavidlee.com/bank-fd-calculation/#comment-398 InvestorIndia Mon, 02 Jun 2008 13:37:38 +0000 http://imdavidlee.com/?p=156#comment-398 Please do not do saving..but use those money to buy something that can generate more money in future..u should do market survey alot on it... Please do not do saving..but use those money to buy something that can generate more money in future..u should do market survey alot on it…

]]> By: winson http://imdavidlee.com/bank-fd-calculation/#comment-397 winson Mon, 02 Jun 2008 03:51:25 +0000 http://imdavidlee.com/?p=156#comment-397 Saving in bank FD will not solve the inflation issue!!! how about if saving in more higher interest rate place?? any to suggest? saving in ASM/ASN/ASB can be considered as saving or investing? Saving in bank FD will not solve the inflation issue!!! how about if saving in more higher interest rate place?? any to suggest? saving in ASM/ASN/ASB can be considered as saving or investing?

]]> By: Carrie http://imdavidlee.com/bank-fd-calculation/#comment-393 Carrie Sun, 01 Jun 2008 09:28:49 +0000 http://imdavidlee.com/?p=156#comment-393 Yes, u r right. But nowadays banks offer many different savings package. I'm now studying the Foreign Currency Saving Deposit. U have any info for that? Yes, u r right. But nowadays banks offer many different savings package. I’m now studying the Foreign Currency Saving Deposit. U have any info for that?

]]> By: Sean http://imdavidlee.com/bank-fd-calculation/#comment-389 Sean Fri, 30 May 2008 07:40:20 +0000 http://imdavidlee.com/?p=156#comment-389 You're technically right, David, but in your example of monthly-compounded FD, your annual interest rate is (1 + 0.03/12)^12 - 1 or 3.04%, so if you invest 10k, your interest will amount to 304 by the end of the year. If you like to work through it month by month, your 10k will attract one twelfth of 300 = 25 in the first month. You re-deposit 10,025 and in the second month get 25 interest on 10,000 plus one twelfth of 3% of 25, or about 6 cents. It gets only slightly better after that. Compounded gains are the best kind, and some of the deposit-takers' advertising might take advantage of the fact that, though simple, the compound interest calculation is more laborious than most people can be bothered with. Those same people do know that frequent compounding is 'a good thing'. If you're planning to deposit a large amount of money, it may be worthwhile to spend some time with a calculator. If you're keen to take advantage of frequent compounding, make sure you calculator has a x^y button! In fact, that monthly FD is not a 3% deposit, it's a 0.25% deposit - doesn't look so good when you read it like that, does it? You’re technically right, David, but in your example of monthly-compounded FD, your annual interest rate is

(1 + 0.03/12)^12 - 1

or 3.04%, so if you invest 10k, your interest will amount to 304 by the end of the year. If you like to work through it month by month, your 10k will attract one twelfth of 300 = 25 in the first month. You re-deposit 10,025 and in the second month get 25 interest on 10,000 plus one twelfth of 3% of 25, or about 6 cents. It gets only slightly better after that.

Compounded gains are the best kind, and some of the deposit-takers’ advertising might take advantage of the fact that, though simple, the compound interest calculation is more laborious than most people can be bothered with. Those same people do know that frequent compounding is ‘a good thing’.

If you’re planning to deposit a large amount of money, it may be worthwhile to spend some time with a calculator. If you’re keen to take advantage of frequent compounding, make sure you calculator has a x^y button! In fact, that monthly FD is not a 3% deposit, it’s a 0.25% deposit - doesn’t look so good when you read it like that, does it?

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