How to get more interest in Savings Accounts is a question that holds significance if you are aiming to maximise the
return on your hard-earned money while ensuring a secure financial position.
While a Savings Account offers a secure way to deposit your funds, optimising interest earnings can enhance your
financial stability and future prospects, especially to beat or remain at par with inflation rates.
Interest rates
Interest rates on Savings Accounts determine how much money account holders earn over time. Interest rates are
determined by various factors, including bank policies, inflation rates, economic conditions and other market
forces.
A higher interest rate on savings can yield greater returns, providing an incentive for individuals to save and
invest. While most banks provide nominal interest rates on Savings Accounts, you can maximise the returns by following a few simple
tips and tricks. You can use them to get a higher interest on the money parked in your Savings Account.
How is interest calculated?
The interest on Savings Accounts is calculated daily based on the closing balance. It is subsequently credited to the
account on a quarterly basis. Here is the formula:
Daily Interest = Daily Balance * (Interest /Days in the year)
Suppose a Savings Account holds a balance of Rs 4 lakhs on a specific day, and the annual savings interest rate is
3%. The calculation would proceed as follows:
Daily Interest = 4lakh * (3/100) / 365 = Rs 32.88
If you maintain a daily balance of Rs 4 lakh for a month, the total interest earned in the quarter would be:
Quarterly Interest = 4 lakh * 90*(3/100) / 365 = Rs 2958.90
Ideas to earn more interest on Savings Account
Here are some of the best ways using which you can earn more interest on a Savings Account:
Maintain a higher balance
Keeping a larger balance can increase the interest earned on a Savings Account. Banks typically calculate interest
daily based on the account balance maintained, underscoring the importance of maintaining a substantial balance.
Given that Savings Accounts offer high liquidity and easy accessibility, they serve as an ideal repository for
emergency funds, allowing you to earn higher interest amount on your savings.
Choose from a wide range of Savings Accounts
You can compare rates from various banks to find Savings Accounts that align with your financial goals and
preferences, helping you earn more on your investments. You can also diversify your investment in multiple Savings
Accounts to earn higher interest on your investments. Several banks offer rewards programs or overdraft
protection to ensure that your money remains safe along with offering decent returns. In simple terms, by comparing
offerings from different banks, one can find accounts with low fees, attractive interest rates, and convenient
digital banking services.
You can visit Axis Bank and find multiple Savings Account options. At present, the bank provides an interest rate ranging between 3%
to 3.5%, depending on the Savings Accounts. On top of all, you can get cashback and other benefits associated with
Savings Accounts.
Link your FDs for sweep-in facilities
Linking your
Fixed Deposits (FDs) to sweep-in facilities offers a convenient way to manage your finances efficiently.
With this feature, any surplus funds beyond a specified threshold in your Savings Account automatically get
transferred into a Fixed Deposit, earning higher interest rates. This ensures that your money works harder for
you, maximising returns while maintaining liquidity. Sweep-in facilities provide the flexibility to access funds whenever needed, without
sacrificing the benefits of FDs.
Indirect earnings through interest credits
When you have an adequate balance, banks credit interest to your account on a quarterly basis. Instead of leaving
these interest earnings idle, you can utilise them for other investment opportunities. For instance, you might
consider investing in recurring deposits or Systematic Investment Plans (SIPs), allowing you to potentially earn even higher returns on
your savings. By leveraging these interest credits for further investments, you can optimise your overall financial
strategy and work towards achieving your financial goals more effectively.
Also Read: Exploring
different types of bank accounts in India
Final note
Maximizing interest rates on Savings Accounts requires a strategic approach to significantly enhance your long-term
financial success and well-being. You can use the above important tips to increase interest earnings from your
Savings Accounts.
Disclaimer: This article is for information purpose only. The views expressed in this article
are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd.
and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader
for taking any financial decisions based on the contents and information. Please consult your financial advisor
before making any financial decision.
