With effect of below RBI directive as describe by CRISIL
RBI has proposed that all scheduled commercial banks start the computation of monthly interest on savings accounts on a daily basis with effect from April 1, 2010, instead of the current method of linking the interest to the minimum balance between the tenth and last day of each month.
thus now banks pay interest rate (currently it’s %3.5 p.a) on a daily basis. This simply means that interest is calculated for every unique balance in your account for the number of days you hold it. However, banks still pay this interest at quarterly (for every three months) basis only
I’ve created a simple Excel sheet that readily aids converting Indian date format (dd/mm/yyyy) used by Indian banks in transactions to the the US date format (mm/dd/yyyy) to facilitate excel formulas to auto perform the computation. And also include the interest calculation.
Refer to the attachment:
Below is visual presentation of showing interest calculation benefits with new daily interest compared to that of earlier each month.
