MUMBAI: A bank account that offers interest on the deposited amount is known as a savings account. Despite the relatively low-interest rates offered by these accounts, they are a terrific solution for having cash on hand for sudden requirements because of their dependability and security.
Although there are some restrictions on how frequently you can withdraw money from a savings account, they provide exceptional flexibility that makes them perfect for creating an emergency fund. To save for an immediate need, such as a car or vacation, investing in best investment plan, or simply putting the surplus funds you don't need into your savings account can grow your money.
Image Source: Shutterstock
What is Savings Account Interest Calculator?
The Savings Interest Calculator is a convenient and simple tool for figuring out how much interest you can receive on the sum in your savings account. To determine the interest, you can receive with your savings account; you must input the balance of your account.
How to Calculate Savings Account Interest Rate?
No time limits or maturity periods apply to savings accounts. You can continue to earn interest if you keep funds in the account. Keep in mind that you need to preserve a minimum level in some savings accounts. Any financial transaction must be made through a savings account. According to the size of the deposit, various banks offer different interest rates.
How to figure out the interest rate for a savings account
According to Reserve Bank of India regulations, your savings account's interest rate is determined daily depending on your closing balance. Based on the type of your savings account and the bank's policy, your bank will credit your account with the interest earned either semi-annually or quarterly.
Do your Math
The savings interest calculator calculation will be as follows if the daily amount is Rs 3 lakhs and the annual interest rate on the savings account is 4%:
With a savings interest calculator, you can estimate the monthly interest in the following way:
Daily Balance * (Days) *Interest / (Days in the year)
3 lakhs * 30 * (4/100) / 365 equals Rs 986 in interest each month.
3 lakh is the daily balance. The days are 30 and the interest rate is 4%.Three hundred sixty-five days make up the year.
How are taxes on savings account interest calculated?
The interest earned from a savings account requires the filing of tax returns. TDS is not assessed on a savings account, according to section 194 A of the IT Act. In this savings account, if the interest received surpasses Rs 10,000, it will be subjected to taxation at the account holder's marginal tax rate.
7 Benefits of Using a Savings Account Interest Calculator
1. Assistance in Financial Planning
A financially promising future is made possible by effective financial planning. Your future and current expenses can be anticipated with the help of a financial plan. That is why have a well-planned finances can help secure the future.
2. Helps in Making Wiser Financial Decisions.
Do you want to purchase a new automobile or home but are unsure if doing so will deplete your savings? Then, it may be helpful to use a savings interest calculator.
3. Supports your Short-Term Objectives
It should go without saying that using a savings interest calculator will help you reach your long-term saving goals. But it can also benefit your immediate objectives.
4. Inform You About Good Investments
To grow your savings, you don't always have to cut back on your expenses. Instead, plan your money with a savings interest calculator. Then, to further boost your funds, you can invest in the best investment plans created by private and public organizations.
5. Enables you to Invest with Freedom
You can invest even if you lack the financial luxury, whether you are planning to invest in equity or investment plans.
6. Assists you in Creating Reserves
Future expenses will be significant, including those for your children's school, their marriage, and your retirement. Every financial objective requires saving.
7. Can Help in Your Inflation Preparation
The rising inflation has led to higher prices. This is why you must invest today to protect yourself from the increasing costs.
Savings is the backbone of a financially sound future; not only to manage your essential expenditure but other necessary expenditures such as your children's education, marriage, medical emergencies and most importantly, your retirement life. Start planning your savings efficiently with the Saving interest calculator.