1. What is the National Savings Scheme?

The National Savings Scheme in Sri Lanka is a government-backed investment program that allows citizens to save money while earning interest. It provides a secure way to grow savings over time with competitive interest rates.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( P \) — Principal amount (initial investment in LKR)
• \( r \) — Annual interest rate (as decimal)
• \( n \) — Investment period in years

Explanation: The formula calculates how much your investment will grow over time with compound interest, where interest is added to the principal each year.

3. Importance of Savings Calculation

Details: Understanding how your savings grow helps with financial planning, setting realistic goals, and comparing different investment options.

4. Using the Calculator

Tips: Enter principal amount in LKR, annual interest rate in percentage, and investment period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the minimum investment amount?
A: The minimum varies by scheme, but typically starts from LKR 1,000 for most national savings products.

Q2: Are the interest rates fixed?
A: Most national savings schemes offer fixed rates, but some may have variable rates. Check current rates before investing.

Q3: How often is interest compounded?
A: This calculator assumes annual compounding. Some schemes may compound monthly or quarterly.

Q4: Are there tax benefits?
A: Many national savings schemes in Sri Lanka offer tax-free interest up to certain limits.

Q5: Can I withdraw before maturity?
A: Premature withdrawal options vary by scheme, often with reduced interest or penalties.