Banks still divided on making monthly interest payouts

For people like 62-year-old Padmaja Shastry, a retired professor in Chennai, and 34-year-old Tarunya Singh, a business executive in Pune, the festive season brought cheer from an unexpected quarter: the Reserve Bank of India. With the central bank last month permitting banks to pay interest on savings and term deposits every month instead of every quarter or at longer intervals, customers with such deposits—who also pay interest on loans on a monthly basis—stand to benefit.

“I invariably fall short of money by the end of the second or the third month every quarter. I have a `10-lakh term deposit with SBI (auto-renewed annually), with 9.25 per cent interest. Monthly interest could help me manage my budget better,” says Shastry, who collected interest every quarter so far. For Tarunya, who got a `15-lakh long-term deposit as a gift from her father at her wedding, a monthly interest income will come in handy to pay off her home loan EMI....Read More >> Click here