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Every month brings with it a varying amount of expenses. At times, bills and the EMIs in a month can become a burden on an individual’s savings. In such a scenario, a monthly interest payout is a feature that can help individuals with their savings. Since July 2021, IDFC FIRST Bank has launched a monthly interest payout for savings accounts, which offers customers a lot more benefits besides the monthly returns.
A monthly interest payout is a credit amount you get at the end of every month on your savings. This feature is commonly available with fixed deposits. With this feature, you get an assured interest every month after opening a savings account with IDFC FIRST Bank. The amount will depend upon your account balance and the interest rate that you are offered.
According to the RBI guidelines, the interest that banks give on your savings account is calculated on a daily basis. This interest gets accumulated and is credited to your account on a quarterly or a half-yearly basis, depending on the type of account you have and your bank’s set of guidelines. It was in 2016 that RBI had made the guidelines of crediting quarterly interest on savings accounts, as opposed to the earlier rule of half-yearly credit.
The formula used to calculate this interest is:
Accumulated interest = (Daily Balance) * (Number of days) * (Interest) / (No. of days in the year)
So, suppose you have a savings account with a balance of 1 lakh, and your bank credits interest on a quarterly basis (every 90 days), with the rate of interest being 3%. Then, the interest accumulated at the end of 90 days will be = (1,00,000) * (90) * (3/100) / 365 = Rs 739.72.
In the case of monthly interest credit that you will receive with an IDFC FIRST Bank savings account, the ‘number of days’ in this formula would be 30. IDFC FIRST Bank offers a high interest rate on savings account - up to 5%. So, with the same account balance, say you get offered an interest rate of 4%, your monthly interest payout will be Rs. 328.7.
If you opt for opening a savings account with IDFC FIRST Bank, you can get monthly interest on a savings account of up to 5%. For a balance of less than Rs 2 crores, you can get an interest of 4-5%, as compared to 3-3.5% that may be offered by other banks. With IDFC FIRST Bank’s interest rates on saving account and its monthly interest credit, you will be earning interest on interest. This means that your savings will be compounded monthly, allowing you to earn on your savings.
Besides this, you also get a lot of special benefits on opening a savings account with IDFC FIRST Bank. Some of these special benefits are:
If your average monthly balance is Rs 10,000, you will receive personal accident insurance of Rs 2 lakhs, and for an average monthly balance of Rs 25,000, the insurance provided will be for Rs 35 lakhs.
If your average monthly balance is Rs 25,000, you can also get air accident insurance of Rs 1 crore.
You can enjoy a special feature of purchase protection on having an average monthly balance of Rs 25,000.
With the rising prices and expenses, simply saving your money will not be enough. You will need an assured return on your savings to be able to cope with them. In such a scenario, getting monthly interest returns on just a savings account seems like the simplest way to ensure that your savings grow. So, make the best of your earnings and begin growing your savings with a savings account at the earliest.
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