Now, your savings account earns more interest

Thursday, April 8, 2010

April 1st, 2010 brings around a pleasant surprise for savings bank account holders- interest income will be higher going forward. This is due to the fact that RBI has instructed banks to change the mechanism of interest income calculation- it’s now going to be based on the ‘daily balance method’ with the rate of interest remaining the same at 3.5% p.a.

Why you must opt for a joint home loan

Earlier method of interest rate calculation

Banks would pay interest @3.5% p.a. on the lowest available balance in the account between the 10th and the last day of the month.

Impact of the same

Any deposit in the account between the 10th and the end of the month, would not earn the account holder any interest as it is not part of the interest rate calculation. Any withdrawal between the same period, would result in lower interest income as the lowest balance would be taken into account for the calculation.

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