SIR My recent experience is that all BANK DEPOSITS made in 2024( LEAP YEAR) between MARCH and DECEMBER have yielded yearly interest lower than promised in the deposit certificate
. I analysed the issue and observed the following.
As per RBI regulations, BANKS can have their own methodology of calculating interest. My BANK has formulated the following rule for calculation of interest on deposits made in a LEAP/NON-LAP YEAR.
LEAP YEAR INTEREST = Principal X rate of interest (%) X No. of days /366
NON-LEAP YEAR INTEREST = Principal X rate of interest (%) X No. of days/365
It may please be noted that in a LEAP YEAR deposits made between MARCH and DECEMBER cover only 365 days but for daily interest 366 is used and payment made for 365 days only. On the other hand, deposits made between MARCH and DECEMBER in a NON-LEAP YEAR preceding the LEAP YEAR extends 366 days in a year but for daily interest365 is used in the formula and payment is made for 366 days. This gives an opportunity for a discerned FD investor not investing between MARCH and DECEMBER of a LEAP YEAR and getting lower interest ,but investing between March andDecember ,lation for a deposit of 2 Lakhs, at 7.5% annual interest payable quarterly
Yearly interest as per deposit terms Rs 15000
Interest payable by the BANK as per formula for 2 lakhs deposit:
Date of deposit Term Interest
01-03-2028 One Year Rs 14965 Three Years 44969
( LEAP YEAR) Two Years 29966
Three Years
01-03-2027 One Year 15034
(NON-LEAP YEAR)
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