Savings account to yield better return

April 01, 2010 01:37 am | Updated 01:37 am IST - NEW DELHI:

The savings account will yield 30 to 40 basis points more to the account holder from April 1 with banks shifting to the new method for calculating interest on savings deposits.

Following the Reserve Bank guidelines, the banks would be required to calculate interest on savings deposits on a daily basis beginning April 1.

At present, the interest rate on savings accounts is calculated on the minimum balance held from the 10th day to the last day of each month. Savings deposit yields an interest rate of 3.5 per cent and is credited to the account on a half-yearly-basis — in March and September.

Payment of interest accumulated, however, even after with the daily calculation would be as per the existing practise of at the end of six months.

“With the new norms coming into effect from tomorrow, the cost of funds for banks would increase between 30 and 40 basis points,” Bank of Maharashtra Chairman and Managing Director Allen Pereira told PTI . “But it would be difficult to say how much of it would translate for individual savings account holders,” he said.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.