As an individual, you are likely to have several banking needs in a day. It can be making a fund transfer to your parents for meeting household expenses or paying utility bills. Back in the day, you would visit the bank in person to fulfil your banking needs. However, today you can fulfil all your banking needs online using your account.
Savings Account has become more of a banking necessity today. You can park your money securely and earn a competitive interest rate on it. You can use the account to make seamless fund transfers, automate periodic payments, and make investment contributions. Savings Account is a common financial product that every bank offers.
Consider the bank’s interest rate, minimum balance requirement, fees and charges, and services before account opening. Following is a guide on Savings Account interest rate calculation.
Calculation
Calculating interest on Saving Account is very simple. Leading banks calculate the interest daily. They consider your account’s closing day balance for calculation. The interest rate is computed at the rate specified by the bank and Reserve Bank of India guidelines. The interest rates get credited by the bank on the last day of every quarter or as decided by the bank.
Note, your Savings Account interest rate largely depends on your account balance. Maintain a higher deposit amount to earn a higher interest rate.
About Savings Account interest calculator
Savings Account interest calculator is an online tool that comes in handy to determine your interest rate. It does away with the hassles of doing manual calculations. You obtain accurate results within minutes. You can find the calculator available on every leading bank’s website. You need to enter key data points to calculate your interest rate. You can use the calculator any number of times free of charge.
Besides simplifying calculations, the calculator assists in financial planning. Say you have an investment goal in mind. You have an idea of the return rate and time period for achieving your investment goal. However, the amount you should invest per month remains a question mark. Here’s where the calculator can help you out.
Enter your investment goal amount, time period, and expected return rate. The calculator will indicate the amount you should invest per month to achieve your goal in no time. You can find the calculator available on the Banking app too. This allows you to carry out calculations at your fingertips.
Tax implications on Savings Account interest rates
Consider the associated tax implications when calculating Savings Account interest rates. Typically, your Savings Account interest rates are added to your taxable income and taxed according to the income tax slab rate you classify for. You can claim a tax deduction under Section 80 TTA, if the interest rates from all your deposits do not exceed Rs. 10,000 in a financial year.
