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Use-case: Window for back out without penalty ?
Interest Pay-out (Simple Interest Type): Financial institutions also offers to pay the monthly realised interest component to its members as cash / cheque on monthly or quarterly based on the interest payout frequency selected for the FD Product.
Use Case: Interest pay-out frequency
An example for simple interest calculation interest payout, member has opted a FD product with a tenure of 12 months with annual interest rate of 12%, FD amount as 100000/-
Interest Realized per Month: 1000/-. Similarly, if it is a quarterly interest payout the realised interest component for 3 months i.e., 3000/-, is paid as cash / cheque to the FD holder.
This type of FD's are generally offered as to give some income to the FD holders.
Job Process for updating matured FD accounts
FD which passes the maturity date and not renewed or withdrawn should be marked as "Matured" in the status column for the respective FD accounts.
Post Maturity Interest Rate:
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Interest will be posted with the Post maturity interest rate as defined while creating a FD account for that customer.
Appendix:
Algorithm to calculate Effective Annual Rate (EAR) = (1 + (i/n))^n -1 where,
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