How is interest calculated on my savings account balance?
Curious about saving account
In India, the interest on a savings account is typically calculated on the daily closing balance. The interest rate is expressed as an annual percentage rate (APR) and is usually credited to the account on a quarterly basis. The interest earned is calculated as the product of the daily closing balance and the applicable interest rate, divided by the number of days in a year. The formula for calculating interest on a savings account in India is:
Interest earned = (Daily closing balance x Annual interest rate)/365
Where:
Daily closing balance: The balance in your savings account at the end of each day
Annual interest rate: The interest rate offered by the bank on your savings account
365: The number of days in a year
It's important to note that the interest rate and the method of calculation may vary depending on the bank and the type of savings account you hold.
Empower Creators, Get Early Access to Premium Content.