Most of us open savings accounts to keep funds safe and earn steady interest. However, only a few people check how that interest adds up and what kind of returns it provides. Over time, even small rate differences can transform how fast funds grow in your bank account. Being aware of the savings account interest rate can help you understand if the particular account is doing well for you. Once you learn the rate structures, the interest calculation method and the credit schedule, getting the actual returns becomes simpler.
A savings account earns interest on your accumulated balance, but it is not always calculated at a single flat rate. Many banks follow a slab-based system, where different parts of your balance earn interest in a specific way. For example, one slab might apply to few lakhs, while another may tie up with a higher balance.
In order to check your potential returns, you can:
*Remember that these rates can be changed if banks revise policies or market rates shift. Following such updates can help you estimate returns more accurately during online account opening.
Most banks calculate interest on the daily closing balance. The commonly used formula for interest calculation is:
Interest = Daily Balance × Days × (Interest Rate ÷ 100) ÷ 365
Even though the interest is calculated daily, it is credited to your account typically every quarter. IDFC FIRST Bank goes above and beyond to credit interest monthly to your savings account. The more frequent the crediting, the faster your balance grows due to compounding. To confirm the disbursal of the interest amount, you may check your bank’s website or account statements.
Once you know your savings account interest rate and credit frequency, you can estimate your earnings. Banks like IDFC FIRST Bank also provide an online savings account interest calculator. You just need to enter your balance and rate to see precise returns.
Besides, check your monthly or quarterly statement to see how much interest was credited. Compare this amount with your own estimate. If the credited amount is not as per your expectations, the reasons may be one of these:
Several factors matter beyond the stated interest rate in deciding how much your savings will grow. To understand your true earnings, you can refer to the following underlying terms that influence real returns:
A savings account works best if you keep track of how it grows. Regularly checking your returns ensures your accumulated funds get complete benefit from the interest offered. With a quick review of rates, balance and credits, you can make sure your savings account is helping to grow your wealth steadily and efficiently.