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Interest Calculation Formula:
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The savings account interest calculation determines the interest earned on your savings based on the daily closing balance and the annual interest rate offered by the bank. This method ensures accurate interest calculation that reflects your actual account usage.
The calculator uses the interest calculation formula:
Where:
Explanation: The formula calculates interest by multiplying the sum of daily balances with the daily interest rate (annual rate divided by 365 days).
Details: Accurate interest calculation helps savers understand their earnings, compare different savings options, and make informed financial decisions about their savings.
Tips: Enter the sum of daily closing balances in INR and the annual interest rate in percentage. Both values must be valid (balance > 0, interest rate ≥ 0).
Q1: How often is interest credited in savings accounts?
A: Most banks credit interest quarterly, though the calculation is done on a daily basis using the daily closing balance method.
Q2: What is the current SBI savings account interest rate?
A: Interest rates vary and are subject to change. Please check SBI's official website or visit your branch for current rates.
Q3: Is the interest earned on savings accounts taxable?
A: Yes, interest earned on savings accounts is taxable under the Income Tax Act, subject to certain exemptions and deductions.
Q4: How is TDS applied on savings account interest?
A: TDS is deducted if the interest income exceeds ₹10,000 in a financial year for resident accounts, as per current regulations.
Q5: Can the interest rate change during the year?
A: Yes, banks can revise interest rates based on RBI guidelines and market conditions. Changes are typically announced in advance.