How do the banks calculate the interest for the amount in our Savings Accou

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How do the banks calculate the interest for the amount in our Savings Accou

Post by vishwas.tp on Thu Apr 03 2008, 16:31

As per my knowledge it is a Simple interest but in a savings account the money will be rolling daily. What amount do bank consider as Principal amount for interest calculation.

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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by enidhi on Thu Apr 03 2008, 19:22

What I had learnt in childhood was this:
For savings account minimum balance between 10th and 31st of the month is considered as principal for that month.

These days some banks follow the concept of Average Quarterly Balance...
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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by vishwas.tp on Fri Apr 04 2008, 19:44

Ok... SO it depends on the Bank...

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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by enidhi on Mon Apr 07 2008, 11:02

Not sure of current scenario-I guess traditional banks (Syndicate, SBI, Canara etc) still follow old practice while ICICI, AXIS etc use AQB.

Will check this and update
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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by vishwas.tp on Tue Apr 08 2008, 18:57

Ok thanks....
I'll also try to find out...... Very Happy

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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by enidhi on Fri Apr 11 2008, 12:02

ICICI Bank has confirmed that they are following traditional method:

"We request you to note that the savings bank account interest calculated monthly on the lowest balance available between 10 to 31st of the month and this interest amount is credited half yearly i:e, March & September of every year."
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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by kbharadwaj81 on Fri Apr 11 2008, 21:32

check this link

http://kingrooster.wordpress.com/2007/06/15/savings-account-how-is-interest-calculated/

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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by enidhi on Sun Apr 13 2008, 12:58

Yes, that post confirms what I have already written..
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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by vishwas.tp on Mon Apr 14 2008, 15:49

Ok I understood the concept..... Thanks

I got the same reply from Citibank. Here is the response from them

"Dear Mr. Vishwas, This is with reference to your query dated April 10, 2008. We confirm that the interest rate applicable to your account is 3.5%. Interest is credited to your account half-yearly on the 1st of March and 1st of September i.e the interest amount is credited twice a year on 1st week of March for the period 1st September of the previous year to 28th February and 1st week of September for the period 1st March to 30th August. The interest is calculated on a monthly basis. Every month the interest accrues on the least balance between the 10th and the last day of the month. [ Interest = amount * rate of interest * number of days in a month divided by Total number of days in a year ] Interest is credited to your account half-yearly on the 1st of March and 1st of September. Please note that as per the standard banking norms, the Savings Account interest is calculated on the least balance maintained from the 10th to the last date of the month."

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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by enidhi on Tue Apr 15 2008, 11:04

Good then.
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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by ashwini on Sun Apr 27 2008, 16:50

many people run out of money by month end and their account balance nears 0...This way banks save lot of interest....
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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by seenathkumar on Sat Jun 12 2010, 12:47

Really thanks for all these information's
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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by srujanaa4 on Wed Aug 04 2010, 16:22

hello everyone..
ok fine..
thanks a lot for your post..

regards,
phe9oxis,
http://www.guidebuddha.com

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Re: How do the banks calculate the interest for the amount in our Savings Accou

Post by sru123 on Sat Aug 07 2010, 14:52

hi
need your help -
can somebody giveme some reference or information about any "finance forums"

regards,
phe9oxis,
http://www.guidebuddha.com

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