Indian banks credit (give or pay) interest to their savings accounts holders quarterly starting from 1st April to 31st March which is universal financial year.
The interest credit date is not fixed and varies from bank to bank.
However, every bank tries to credit the earned interest as soon as possible based on the average maintained sum on their decided term.
So, here is a chart that shows how most banks pay interest to their saving account holders based on how much they hold in a quarter.
| Quarter | Months | Credit Date |
|---|---|---|
| 1 Quarter | April, May, June | 30th June |
| 2 Quarter | July, August, September | 30th September |
| 3 Quarter | October, November, December | 31st December |
| 4 Quarter | January, February, March | 31st March |
Let’s take an example, a savings account holder maintained ₹1,00,000 in quarter one which starts from 1st April and ends on 30th June while the interest rate is 3.5%.
₹1,00,000 × 3.5% = ₹3,500
₹3,500 ÷ 4 = ₹875
₹875 before any taxes.In this case, he’ll receive ₹875 as an interest income in the same account.
Note that this source of income is taxable in the eyes of law.
As of now, a bank charges 10% TDS (Tax Deduction Source) only when total interest income crosses above ₹10,000 in a given year.
But these TDS charges are maintained at the branch level, so you’ll enjoy another limit in some other branch or bank.
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