Here is the way how you calulate your Saving Bank Account (S.B.A/c) Interest.
Introduction:
Savings accounts are accounts maintained by commercial banks, savings and loan associations, credit unions, and mutual savings banks that pay interest but can not be used directly as money (by, for example, writing a cheque). These accounts let customers set aside a portion of their liquid assets that could be used to make purchases while earning a monetary return.
Features
Obtaining funds held in a savings account may not be as convenient as from a demand account. For example, one may need to visit an ATM or bank branch, instead of writing a cheque or using a debit card. However, this transference is easy enough that savings accounts are often termed near money.
Some savings accounts require funds to be kept on deposit for a minimum length of time, but most permit unlimited access to funds. True savings accounts do not offer cheque-writing privileges, although many institutions will call "savings accounts" their higher-interest demand accounts or money market accounts.
All savings accounts offer itemized lists of all financial transactions, traditionally through a passbook, but also through a bank statement. [Source: Wikipedia]
Metedology:
Interest on S.B.A/c is calculated on half yearly basis. Bank will take the minimum amount kept in the account from the Date 10th of each month to the last day of the month.
For Ex: You Have deposited $1000.00 on 1st of January, Withdrew $ 150.00 on 9th Jan. So, the Balance on 10th Jan is $ 850.00. Again you withdrew $ 500.00 on 20th Jan, ( Bal: $ 350.00) and Deposited $ 300.00 on 25th Jan, ( Bal: $ 650.00) and on 31st Jan, you withdrerw $ 100.00 (Bal: $ 550.00).Therefore your Minimum Balance kept in the account for the Month of January is $ 350.00 ( 20th Jan).
The same pattern is used for 6 months. Then the total Minimum amount for all the 6 Months is Calculated.
Assuming the total Minimum Balance for 6 Months is $ 2350.00
Assumiing the Prevailing Rate of Saving Bank Account Interest is 4.5% p.a.
The interest for the total Minimum Balance is
= 2350*4.5/100
= $ 105.75 p.a.
= Interest for 6 Months is = 105.75/2
= $ 52.875.
Hope this would help you in Calculating the Interest earned from your Saving Bank Account.
Happy Reading :-)
