Whether you're planning for a major purchase or saving for the future, knowing how to calculate your interest rate empowers you to make informed decisions. In this guide, we'll walk you through the fundamentals of interest rates, demystifying the calculations behind them. After all, Cowrywise is big on transparency and simplicity.

The interest rate is offered per annum and prorated for the period during which your funds are saved. Here’s the formula for calculating the interest.

The interest on capital is divided by 12 months to get the interest earned in a month.

For example; 
12% of 100,000 / 12 months = N1,000 => 1 month returns.

N1,000 * 3 months = N3,000 - 3 months of returns.

The example above is based on the assumption that N100,000 is saved at the beginning of the tenure.

As your capital increases, so does the interest earned.

The math can get a tad bit complex, which is why you get a daily breakdown of your interest earned. To see this, simply click on the view earnings icon on your savings plan.

You can also calculate your interest using our interest calculator tool to get an idea of the total interest you are expected to have at the end of your savings duration.