1. What is Federal Bank Savings Account Interest Calculation?

The Federal Bank savings account interest calculation determines the monthly interest earned based on your average monthly balance and the applicable annual interest rate (2.50% to 3.00%).

2. How Does the Calculator Work?

The calculator uses the interest formula:

Where:

• \( Average\ Balance \) — Monthly average balance in INR
• \( r \) — Annual interest rate percentage (2.50% to 3.00%)

Explanation: The formula calculates monthly interest by converting the annual rate to a monthly rate and applying it to your average balance.

3. Importance of Interest Calculation

Details: Understanding how interest is calculated helps you maximize your savings returns and make informed decisions about maintaining appropriate account balances.

4. Using the Calculator

Tips: Enter your monthly average balance in INR and select an interest rate between 2.50% and 3.00%. All values must be valid (balance > 0, rate within specified range).

5. Frequently Asked Questions (FAQ)

Q1: What is the current interest rate range for Federal Bank savings accounts?
A: Federal Bank offers 2.50% to 3.00% annual interest on savings accounts, depending on the account type and balance.

Q2: How is monthly average balance calculated?
A: Monthly average balance is calculated by summing the end-of-day balances for all days in a month and dividing by the number of days in that month.

Q3: When is interest credited to the account?
A: Interest is typically credited quarterly or monthly, depending on the bank's policy.

Q4: Are there any minimum balance requirements?
A: Yes, Federal Bank has minimum balance requirements that vary by account type. Failure to maintain the minimum balance may attract charges.

Q5: Is the interest earned taxable?
A: Yes, interest earned on savings accounts is taxable under the Income Tax Act, 1961, though you can claim deductions under Section 80TTA.