Savings Accounts are basic financial products that various banks in India offer. People should open and use them for fund safety and quick access when required. They let you save money, deposit it, transfer funds, withdraw them, and even help you earn interest on the idle funds available in your account. All investment products available in the market may not necessarily give you the double benefit of cash liquidity and interest.
The primary perk of opening Bank Accounts is their interest rate. You can calculate them using the Savings Account interest rate calculator on the closing amount daily. The accumulated interest gets credited to the depositor’s account half-yearly or quarterly, depending on the account type and the bank’s policies. You can use the formula:
Monthly Interest = Daily Balance x Number of Days x Interest / Days inia a Year to calculate the Bank Account interest earnings.
Savings Account interest and TDS
The interest amount gathered from Savings Accounts is called Income from Other Sources. You need to file the interest earned for Income Tax returns. However, the Tax Deducted at Source is not applicable for interest earned till Rs. 10,000 under Section 194A of the Income Tax Act. Interest exceeding this amount is taxable.
Saving Account interest rate calculator
A Savings Account interest calculator helps you calculate the interest amount earned from Savings Accounts. It requires information like the average balance and interest rate offered by the bank. It also needs you to select whether the interest is payable monthly, quarterly, half-yearly, or yearly. The tool computes the interest you will receive for the daily balance at the given interest rate.
Minimal balance
Some banks require account holders to mandatorily maintain a minimum daily balance, while others ensure a minimum quarterly balance maintenance. Average balance is the amount you need to maintain in the Savings Account over a certain period. You can add up the daily balance and divide it by the number of days per the defined period’s requirements.
Most major Indian banks offer Basic Savings Bank Deposits or Zero-Balance Accounts that do not mandate a minimum balance. You can operate them like Regular Accounts.
Benefits offered
Savings Accounts offer multiple benefits to their users, such as security, unlimited access, minimal cash requirements, and Online Banking facilities. The funds deposited in them are secure. You can access and withdraw them whenever there is a financial emergency. You also have the facility to begin investing minimal cash.
Deposit the required amount upon account opening and start using the account as usual. You can check transactions, link Credit Card Accounts through the Banking app, and more.
Conclusion
You also get Insurance benefits of up to Rs. 5 lakh from the Deposit Insurance and Credit Guarantee Corporation for the principal and interest amounts as of the date of liquidation or cancellation of a bank’s licence.
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