Interest is calculated daily based on the account balance at the end of the day and paid out to customers monthly.
Here's the formula for the interest calculation:
Interest = (Deposit amount) × (Interest rate per day) × (Number of actual days)
Let's illustrate with an example:
Suppose you have a deposit of ISK 100,000 with an interest rate of 7,75% (annually) using our method. You deposit on July 1st and keep it unchanged until July 31st, with 30 days between those dates.
- Interest rate per day = 7.75% / 360 = 0.02153% (rounded to 5 decimal places)
- Number of actual days = 30
Interest = ISK 100,000 × 0.02153% × 30 = ISK 646
So, the interest accrued for this period would be ISK 646.
Remember, if you deposit or withdraw more during this period, the final interest payment will change.