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How To Calculate Saving Account Interest Rates?
The first step in your banking journey is opening an account. It is a financial product that allows you to park your funds, keeping them secure and easily accessible. There are different types of accounts you can open based on your banking requirement. Savings Account is the most common account to open. Opening this account is both necessary and advantageous.
Savings Account comes in handy to take care of your day-to-day banking requirements. It is an interest-bearing account. This means you earn a competitive interest rate on Savings Account opening online. Since the account interest rate offered varies from bank to bank, you should explore the market, compare all options, and open an account with a bank having the highest interest rate offering.
Features and benefits:
You can make any number of deposits to your account. There is no cap limit to the number or the value of deposits you can make. However, for deposits exceeding Rs. 50,000, you need to submit your PAN card details.
... all Savings Accounts follow a minimum balance requirement. It is the amount you need to always maintain in your account, failing which you are liable to pay the non-maintenance charge.
On Savings Account opening online link to your mobile banking app. This will allow you to make fund transfers and various payments on the go.
Savings Account interest calculations
As mentioned, Savings Account is an interest-bearing account. The RBI has come up with rules for the account interest calculations; they are as follows:
All banks are to offer a flat interest rate on balances up to Rs. 1 lakh. This is regardless of the balance in your account.
Account balances exceeding Rs 1 lakh are likely to attract a higher interest rate.
Here’s an example to understand Savings Account interest calculations better. Let's assume you hold a daily balance of Rs 50,000 in your account. The bank offers an interest rate of 3.5% on your deposits.
Daily interest = Daily balance x interest rate/ 365
Using the above interest calculation formula your daily interest will be Rs. 4.7. Note, that daily interest rate calculations are made considering your outstanding balance account. The daily interest will increase with an increase in your account balance and vice-versa. Hence, you should always aim to keep up with a good balance in your account.
Although the bank calculates interest on your deposits daily, it is only credited to your Bank Account online every quarter or half yearly. This policy again differs for every bank. Reach out to the bank’s customer representative or check their website to learn more about the Savings Account interest rate and its calculation method.
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