Depositors are tipped to earn better returns on bank savings accounts in the future with Reserve Bank of India (RBI) having altered the calculation of interest earned on such deposits. In its annual policy statement for FY10, RBI has instructed banks to calculate the interest on savings bank accounts on a daily basis. Currently, banks calculate the interest based on the minimum balance held in saving Account from the tenth to the last day of each calendar month. Since interest is paid only on the minimum balance, the effective return to the depositor works out to around 2.9%, way below RBI’s mandated 3.5% rate.
Calculation on a daily basis would be effective from April 2010. Senior bankers say that the salaried class and pensioners would benefit the most by RBI’s move. Bank officials say that private lenders, which have a large number of salaried accounts in their portfolios, could witness a partial rise in their cost of funds.
Wednesday, April 22, 2009
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