Savings bank account and term deposit holders can now earn interest at shorter intervals, with the Reserve Bank today allowing banks to revise the periodicity of interest payments. "As all commercial banks are now on core banking platforms, it has been decided to give banks the option to pay interest on savings deposits and term deposits at intervals shorter than quarterly intervals," RBIGovernor Raghuram Rajan said in its Second Quarter Review of Monetary Policy 2013-14. Presently, banks are required to pay interest on savings and term deposits at quarterly or longer intervals. The savings deposit rate for most banks is 4 per cent per annum, while in some cases, it is as high as 7 per cent. The interest rate on savings bank accounts is calculated on a daily basis. Term deposit rates are 8-9 per cent for tenures of one year and above.
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