Monday, February 22, 2010

Payment of Interest on Savings Bank Account on Daily Product Basis

Good News for all that Reserve Bank of India , has issued Notification for allowing interest on saving Bank Accounts on Daily basis. Presently bank is paying interest on savings on the minimum balance between 10 to last day of month.Now interest will be given by bank on daily product basis w.e.f. 1st April,2010. If you are not clear regarding the effect of saving bank interests calculation, read following example for clarity.

Example:-
Your Saving Bank Account Detail as Per Bank is As Under

Date 01.02.10 By Opening Balance Cr Rs. 100025.00 Bal. 100025.00
Date 15.10.10 To Withdrwal Dr. Rs. 90000.00 Bal. 10,025.00
Date 16.10.10 By Credit Cr Rs. 90000.00 Bal. 100025.00

Interest @ 3.50 % in present system was Rs. 29.24 on Rs. 10025.00 only.

W.e.f. 01.04.2010 Interest Calculation will be made as under due to daily product basis :

Date Daily Product
01.02.10 100025
02.02.10 100025
03.02.10 100025
04.02.10 100025
05.02.10 100025
06.02.10 100025
07.02.10 100025
08.02.10 100025
09.02.10 100025
10.02.10 100025
11.02.10 100025
12.02.10 100025
13.02.10 100025
14.02.10 100025
15.02.10 10025
16.02.10 100025
17.02.10 100025
18.02.10 100025
19.02.10 100025
20.02.10 100025
21.02.10 100025
22.02.10 100025
23.02.10 100025
24.02.10 100025
25.02.10 100025
26.02.10 100025
27.02.10 100025
28.02.10 100025
Total = 2710700 * 3.50/100/365

Interest will be Rs. 259.93. w.e.f. 01.04.2010

Read notification of R.B.I. as under

RBI/2009-10/322
DBOD. NO. Dir. BC 77/13.03.00/2009-10
February 19,2010
Dear Sir

Payment of Interest on Savings Bank Account on Daily Product Basis

Please refer to our circular DBOD. NO. Dir. BC.. 128/13.03.00/2008-09 dated April 24, 2009 advising banks that in view of the present satisfactory level of computerisation in commercial bank branches, it is proposed that payment of interest on savings bank accounts by scheduled commercial banks would be made on a daily product basis with effect from April 1,2010. Further, banks were advised that in order to ensure a smooth transition, they may work out the modalities in this regard.

2. We advance that payment of interest on savings bank accounts may be made by banks on a daily product basis with effect from April 1,2010.

Yours faithfully

(P. Vijaya Bhaskar)
Chief General Manager-in-Charge


View online Calculator for interest calculation of Saving Bank Account (Click Here)

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