# Thread: Interest on savings bond

1. ## Interest on savings bond

I'm looking at the Nedbank Green Savings Bond and was just wondering about the following.

It says that there is a choice on how interest will be paid out, either monthly, quarterly, half-yearly, annually or on expiry. The interest rate on a 60 months investment is as follows:
Interest Monthly : 7.39%
Interest Half-yearly: 7.50%
Interest on Expiry: 8.90%

How do the calculations for this work?
(I will go in and see someone at Nedbank to explain it to me but if anyone here has any idea?)

The 7.39% Monthly option - I assume that 7.39 is the annual interest rate paid out monthly?
So, for example, if I put in R1000 I would get R73.90 interest a year, but paid out monthly (R6.16 a month) into a separate account.

If I choose to be paid out on expiry, does that mean the interest is still calculated monthly but compounded?

What I like about this is that it's an investment in renewable energy, I'm just not sure how to calculate what the amount will be for the various options after the 60 months is over...

2. It is a question of compound interest, so the monthly one you would earn interest on the previous months interest... Not just the principle amount as per the last option.

3. Originally Posted by Scooby_Doo
It is a question of compound interest, so the monthly one you would earn interest on the previous months interest... Not just the principle amount as per the last option.
That's what confuses me because the description says interest will be paid out, either monthly, quarterly, half-yearly, annually or on expiry, not, interest will be calculated. If the interest is paid out that implies it's paid out into another account, rather than being a case of compounding interest?

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