19 thoughts on “Savings account interest rate – Now calculated on a daily basis

  1. Grace Harary

    Wonderful info! I actually fully loved the article – well-defined and to the point, just the thing I like

    Reply
  2. Vidya

    This is actually one & the same as earlier. Not going to effect on high evel, since interest rate is very low.

    Only bank officers job they are increasing, bothing else.

    Reply
  3. Rambabu

    Dear Sir,
    Thanks for the information with a good example. Now I would request you to kindly calculate & inform with respect to above example the interest amount as per RBI guideline which is effective from 1/4/2010.

    Reply
  4. Tushar Khirpurikar

    Dear Sir,

    Thanks for sharing old interest calculation method with example.
    I request you if a farmula can be framed for both old and new method with example, it would help us to understand in better manner.

    Reply
  5. Krish

    Hi naveen, thanks for the example. can you give us same example with the new interest rate daily calculation. would be useful to us.

    Reply
  6. Bikram

    Hi Naveen,
    Thanks for explaining the whole procedure of daily interest rate calculation with a good example.

    Reply
  7. Sharad Phadke

    RBI circular does not ask banks to pay the interest as you say. The circular says banks are “advised” to pay on daily balance basis and hence it need not be on daily product basis.
    Bank of India has replied to me that they are calculating on monthly product basis.
    Thanks for this post found through google.

    Reply
    1. Naveen Post author

      Yes…it is advised and lot of banks are following that. Don’t expect government banks to run through the competition. They don’t bother about it. I went to a government bank to take a new account. It took whole day to take the account with lot of mistakes in my full name and address and the debit card came with my name printed with spelling mistakes. I have several instances like this with govt. banks. Avoid them if possible. I have several accounts with private banks and they follow the rule to attract the customers and to retain the old ones.

      Read these:
      http://www.icicibank.com/Personal-Banking/account-deposit/savings-account/terms-conditions.html#tc13
      http://www.axisbank.com/NewsPressReleases/earn-more.asp

      Reply
  8. Krishna

    Thanks for the information. I want to know if HDFC bank is also implementing this advise of daily interest calculation. Can some one help me out.

    Reply
  9. prabhu

    can you give us same example as how the new interest rate on daily basis is calculated
    prabhu

    Reply

    Reply
    1. Naveen Post author

      For example, in a month if you have 1200, 750, 520, 350 on 1st, 2nd, 3rd, and 4rth day, rate of interest will be calculated as

      balance x rate of interest/365

      For the first day in the month, you have Rs.1200 and the amount you get as interest on that day would be 1200×4%/365=13 paise.

      Hope this answers all your doubts.

      Reply
  10. Rajendra Prasad S

    Now the reserve bank who controlls the SB interest rates have deregularised the rate of interest on SB account and Banks have their choice to pay interest on SB account according to their choice w.e.f Nov 2011

    Reply
  11. sriram

    sir
    i have tried to calculate the above decent amount of difference in the calculated and actual Interest Obtained for 2011 period in my SBH Account…..How to Justify the Difference

    Reply

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