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Maximize your Savings Potential with Monthly Interest Credits

Traditionally, savings bank accounts in India are known to offer interest on your savings deposit on a quarterly basis. We at IDFC FIRST Bank are one of the few banks who offer monthly interest credit on your savings account , where the interest pay-outs on your savings take place on a monthly basis. In this, the interest is calculated on the daily closing balance and credited to your account balance each month. 

With a monthly interest credit in your savings account, the interest earned is compounded more frequently, with every passing month. Compounded interest means you earn interest on interest, along with the principal amount,  generating better returns. This compounding effect is what allows your account balance to grow rapidly over time. 

What is a monthly interest pay-out on savings account?

Monthly interest on a savings account is the regular disbursement of interest earned on the funds deposited in the account. When you maintain a balance in your savings account, the bank pays you interest on that balance monthly. This interest is calculated based on the amount of money you have in the account and the prevailing interest rate. The monthly interest payout provides you with a steady stream of earnings on your savings, which can help your money grow over time. This arrangement encourages individuals to save money while also ensuring that their savings generate returns periodically, contributing to their financial well-being.

How is monthly interest on savings account calculated?

Calculating monthly interest on a savings account involves multiplying the average daily balance in the account by the monthly interest rate. The average daily balance is determined by adding up the closing balance of the account for each day of the month and dividing it by the total number of days in the month. The monthly interest rate is usually an annual interest rate divided by twelve to get the monthly rate.

Once the average daily balance and the monthly interest rate are determined, multiplying them yields the amount of interest earned for that month. This calculation method ensures that the interest earned reflects the account's balance throughout the month, providing an accurate representation of the interest earned on the savings.

Formula for calculating monthly interest on a savings account

The formula for calculating monthly interest on a savings account is quite straightforward:

Monthly interest = (Average daily balance) x (Interest rate per annum/12)

To find the average daily balance, sum up the closing balance of the account for each day of the month and divide it by the total number of days in the month. The monthly interest rate is typically the annual interest rate divided by twelve to convert it into a monthly rate. Multiplying the average daily balance by the monthly interest rate yields the amount of interest earned for that month

Interest Rate Calculator

    To use the savings account interest rate calculator, follow the steps as below:

    • Input the principal amount, i.e., the initial deposit by adjusting account balance slider.
    • Adjust the slider for the annual interest rate.
    • The calculator will automatically display the calculated interest earned over the specified period in real time and compare it with interest you would receive from other banks.

    You can further adjust the inputs to compare potential earnings based on different scenarios. Finally, review the results to make informed decisions about your savings strategy.

calculator

Advantages of choosing a savings account with monthly interest credits

If you want to grow your savings and earn regular interest income, opening an IDFC FIRST Bank Savings Account with monthly interest credits is a smart choice. Here are some of the benefits of opening an account with us:

    • Earn regular interest income
    • Maximize your savings potential
    • Earn competitive interest rates up to 7.25% p.a.
    • Meet your financial goals quickly

     

     

Here’s a detailed overview of our Savings Account with different AMB variants:

Special Features Average Monthly Balance of ₹10,000 Average Monthly Balance of ₹25,000
ATM Withdrawal Free and unlimited transactions at any bank ATM* Free and unlimited transactions at any bank ATM*
Daily ATM Withdrawal Limit ₹1 lakh ₹2 lakhs
Daily Purchase Limit (POS) ₹4 lakhs ₹6 lakhs
Personal Accident Insurance ₹5 lakhs ₹35 lakhs
Air Accident Insurance ₹30 lakhs ₹1 crore
Domestic Airport Lounge Access NIL Complimentary, once per quarter
Debit Card VISA Classic VISA Platinum
Lost Card Liability ₹4 lakhs ₹6 lakhs
Purchase Protection ₹50,000 ₹1 lakh
IMPS FREE FREE
Cheque Book FREE* FREE*

T&C Apply

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Interest rates: overview

overview

Enjoy attractive interest rates across various account balances:

    Effective from 15/07/2024:

    • 3.00% for balances <= 5 Lac
    • 7.25% for balances > 5 Lac <= 50 Cr
    • 5.00% for balances > 50 Cr <= 100 Cr
    • 4.50% for balances > 100 Cr <= 200 Cr
    • 3.50% for balances > 200 Cr



    Please note that the Bank has reduced interest rates to 3% on savings accounts for balances up to Rs. 5 lac. The interest rate paid earlier was 3.5% for balances between Rs. 1 lac up to Rs. 3 lac and 4% for balances between Rs. 3 lac up to Rs. 5 lac.


Disclaimer: With IDFC FIRST Bank Savings Accounts, enjoy Zero Charges on all Savings Account services. These services are being offered free in good faith, and in case of misuse of services, the Bank reserves the right to levy charges. Forex mark-up fee will be applicable on International ATM/POS/Debit card transactions. T&Cs are subject to periodic changes. All rights reserved.