YOUR SAVINGS ACCOUNT TO GET YOU MORE INTEREST INCOME - THANK THE RBI.

Reserve Bank Of India (RBI) somehow loves the date of 1st April. On this year April 1st 2009, it gave all the customers having ATM cards a unique gift of no transaction fee on cash withdrawals from non member banks ATM. So virtually ATM withdrawals from any ATM became free for the user , irrespective of his principal or mother bank. Come April 1st 2010, RBI has mandated that all the banks will have to calculate the interest on the savings account on a "daily product basis".
This means that you will get interest even if you keep money in the account just for one day in a month.Currently banks give you interest on savings accounts depending on the lowest balance held between the 10th and the last day of the month. If you keep money in your savings account from 1st to the 9th of the month and withdraw it on 10th , then you will not any interest on your deposits even though the bak had your money for 9 days. This helps the bank enormously as most account holders get their salary on 1st of the month and by 10th they generally use up money for paying up EMIs, rent and other fixed expenses. So the banks typically have the highest balance in savings account between 1st and 10th of the month but, due to the current rule, they avoid giving any interest to the account holders.
But, this will change from 1st April 2010. To illustrate how this will work, let us say you deposit SR 100000 in your savings account on April 1st. On April 10th you withdraw all your money. On april 11th you put the money back and then withdraw it again on 31st May.Under the current rule, you would not get any money as interest.
But with new rule coming in force next year, for each of the first 9 days you will be paid an interest of Rs 9.6 (@3.5% pa. which is the savings interest rate mandated by RBI).On the 10th day no interest will be paid since you removed your money.Interest payment will again resume from 11th April and will go on till 30th May. 31st again you will get no interest as your removed your money.So for the entire period , the depositor will be paid Rs 566 (59*9.6).
This is a big development for all of us who keep our money in savings account and we need to thank the RBI for taking this wonderful step. Whats the catch in it? Well none . You only have to wait for your calender to turn to 1st April 2010 to enjoy this benefit.

Comments

  1. Greeting Card PrintingApril 27, 2009 at 9:31 PM

    Interesting concept. Really will help account holders earn more when they save more. I guess everyone's looking forward to next year's April 1st.

    ReplyDelete

Post a Comment

Popular posts from this blog

TAX IMPLICATION ON GIFTS TO RELATIVES

We all do indulge in the practice of giving and receiving gifts both monetary and non monetary. But these gifts at times can attract income tax on it and as such one needs to know the exact tax treatment of gifts both in the hands of the person gifting and the person receiving the gift. Gift to wife or spouse - If you make a gift in kind or cash to your spouse then it is not taxable in their hands. However, any income generated by the gift in kind or cash shall be treated as your income. Gift to fiance - Any gift given in kind is tax free. However , cash gifts are tax free only till Rs 50000. If the gift amount exceeds Rs 50000 then the entire gift amount is taxable in the hands of your fiance. Gifts on marriage - All gifts received on wedding are tax free. There is no monetary limit attached here. Gifts to parents - Any gift in kind or cash is tax free in the hands of your parents and does not lead to any tax liability for you either. In all the above cases, one needs to reco
Read more

Should you buy Gold from Banks ??

Image
The dream run up in Gold prices in last few years has enticed all and sundry as an attractive investment asset class. It has not only proved to be an excellent hedge against inflation a, reputation it holds with elan since time immemorial, but also, has delivered returns in excess of debt, equity etc as an asset class. Thus , it has emerged as the Best Investment Option in last few years. However, skeptics believe that gold has had its share of dream run and may not be possible for investors who are entering into now, to expect the same kind returns in future . But, if you are on of those who believe that best years of gold as an asset class is still ahead of us and want to invest in physical gold then you must be pondering where should you buy the gold from? These days we have seen most of the banks aggressively positioning them as place where one can buy physical gold bars/coins etc. The other option is offcourse our old Jeweller , both unorganized and large organised players
Read more

IPO INVESTING IN PSU - GOOD WAY OF MAKING MONEY IN STOCK MARKETS

I have always stayed away from directly getting into equity markets. This was inspite of my firm belief that equity is the best asset class to invest in if one intends to make money over long period of time. The reason why I stayed away was my inability to devote enough time to research the stocks before investing and hence I always relied on Mutual Funds for equity investing. But, I always had this urge of making quick buck in equity markets. The most popular mode of short term investing in stock markets in via trading either intra day or for few days trades. But IPO investing for listing gains can be a great opportunity for common people to make money in stock markets in India. This I can talk from my own experience of investing in CIL IPO. For retail investors there was money to be made in this IPO and I personally made About RS 19000 in this IPO on an investment of Rs 46000. That's cool 46% in less than a month's time. This extra 19000 could be used to pay off my electrici
Read more