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5 Things To Learn About Annual Interest Returns

5 Things To Learn About Annual Interest Returns

Here are 5 things you need to know about annual interest returns:

1. The World Bank Estimate

The World Bank estimates that up to 2014, the penetration of banks in all segments of India increased from 35% in 2010 to 53% in 2014. When the ruling political parties at the centre changed in 2014 and the present government floated its Jan Dhan Yojana Scheme, a further proliferation of savings bank accounts took place. The scheme aimed at financial inclusion for all classes and masses of Indian society – and by January 2015, over 125 million new bank accounts had been opened.

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The implications for more savings accounts and interest to be earned on them are tremendous. It would appear that savings account holders can keep their idle finds for longer periods of time and earn interest on them, so as to increase the size of the deposit. Today, a majority of nationalised and private Indian banks offer 4% interest on savings deposits. However, people are also choosing other avenues of increasing the size of their savings instead of merely depending on 4% annualised interest rate returns.

2. How the interest used to be calculated before year 2010

Prior to the year 2010, interest on saving accounts were calculated on the basis of the lowest available deposit amount in the savings account. The savings account interest rate was calculated at 4% for the days from the 10th of the month to the final day of that month. The prominent condition on this interest rate calculation was that any money deposited into the account during this month was not considered for the computation, but withdrawals were counted. Thus, one would need to deposit money before the 10th of every month only, to bulk up the deposited amount and thus earn more money by way of the 4% interest.

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3. How the interest is calculated post 2010

In the year 2010, from April 1 to be precise, the RBI mandated that banks rework their computations for interest on saving accounts. Thus, banks started calculating the interest on a daily account basis. Let us use the example of Rupesh Kumar to illustrate the calculation:

Say Rupesh has an opening balance of Rs 30,000 on the 10th day of the month. On the 15th day, he was paid Rs 40,000 by a client. So the bank calculates interest on the deposit from the 10th to the 15th day. On the 25th of the month, Rupesh makes a prepayment of Rs 50,000 on his home loan. Thus, the bank computes interest on the balance from the 15th to the 25th day. Finally, it calculates the interest on the balance between the 25th day to the final day of the month. This way, every rupee in Rupesh’s account earns interest and there is no need to time money deposits.

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4. Larger returns on savings bank accounts

After the RBI deregulated the 4% cap on savings account interest rates in India in October 2011, Indian banks were free to impose their preferred interest rates on savings deposits. Today, while most banks have stuck to 4% interest rates, some other banks in India offer up to 6% or even 7% interest on savings accounts.

Naturally, banks are keen to entice customers to open savings bank accounts with them, but they are also encouraging customers to maintain their deposits over a longer spell of time to earn higher interest on them. Premier banking institutions in India are also offering ‘Sweep in/Sweep out’ accounts, which provide the benefits of larger deposits in the form of fixed deposits; these can be liquidated in times of need. These accounts make it possible to earn decent sums of money by way of savings account interest.

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Now you know more about interest rates. Hopefully this will be able to help you in opening up your own or managing your current one.

Featured photo credit: ih Money Smarts via ihmoneysmarts.org

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Bhavik Sarkhedi

Founder of Write Right - A Content Marketing Company

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Last Updated on May 20, 2020

What Are Analytical Skills (And How to Strengthen Them For Success)

What Are Analytical Skills (And How to Strengthen Them For Success)

Everybody makes bad decisions. Some people, however, are more capable of making better decisions that inch them closer to success.

These individuals are not ruled by emotions, desires, or hunches. Rather, they depend on their analytical skills to overcome challenges regardless of urgency or complexity.

What Are Analytical Skills?

According to Richards J. Heuer Jr., a former veteran of the CIA,[1]

“Thinking analytically is a skill like carpentry or driving a car. It can be taught, it can be learned, and it can improve with practice. But unlike other skills, it is not learned by sitting in a classroom and being told how to do it. Analysts learn by doing.”

Analytical skills can be considered as one of the critical life skills that are not taught in schools. It comprises of visualization, critical thinking, and abilities for gathering and processing information.

Here’s a closer look at some of these abilities:

Visualization

Also tied to a person’s creativity, visualization is the ability to predict the possible outcomes of strategies and actions. In a professional setting, visualization involves the analysis of data – often through illustrations like charts, graphs, and detailed lists.

Critical Thinking

Simply put, a person’s ability to think critically can be measured by his or her consistency in creating reasonable decisions. It pertains to the ability to evaluate information, siphon what’s useful, and draw conclusions without being swayed by emotions.

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As a critical thinker, you’ll find yourself challenging assertions and finding loopholes in proposed solutions.

Computing

Whether you like it or not, you need to be comfortable with numbers if you want to sharpen your analytical skills. Bear in mind that computing encompasses other skills like cost analysis, budgeting, and performing general calculations.

In business, you need to use computations when weighing the risks and benefits of any given strategy.

Problem-Solving

Remember that analytical skills are used not just to understand problems, but also to develop the most suitable course or courses of action. This relates to your goal-setting skills, which involve breaking down and prioritizing between objectives.

Resource Management

Lastly, analytical skills involve some degree of resource management depending on the task at hand.

For example, professionals with a tight schedule must know how to effectively manage their own time – also known as one of the most important resources in the world.

Business leaders, on the other hand, must know how to manage company resources, including cash and manpower. Take note that the definition of analytical skills may change to match the requirements of a specific situation.

For example, upon hiring a web developer, analytical skills may refer to the ability to determine the needs of online users, understand web analytics for optimization, and identify visual elements that can match a company’s brand.

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The skillset above, however, should be applicable in most if not all scenarios.

Develop Your Analytical Skills for More Growth Opportunities

There’s no question that the right decisions lead to positive results. It doesn’t matter if you’re running a business or simply trying to climb the corporate ladder. By training your analytical skills, you position yourself for more growth opportunities while staying away from negligible actions you will regret.

For example, you plan to launch a new startup in your local community – but struggle to decide the niche you want to enter. Since you’ve been a technophile your whole life, part of you desires to invest in a gadget store. If you’re passionate about your business, success will come – right?

If you have sharp analytical skills, you begin to see your plans in whole new dimensions.

What are the possible outcomes of this venture? Does the local market have a need for a new gadget store? How much do I need to get started – and how much should I sell to make a profit?

Depending on your findings, you can determine the feasibility of your business idea without letting your emotions get in the way.

6 Ways to Strengthen Your Analytical Skills

There are several approaches when it comes to developing an individual’s analytical skills. For instance, psychologists agree that reading fantasy stories as a child can help sharpen critical thinking.[2]

Research also suggests that undergoing traditional education has a positive effect on a person’s IQ and analytical skills.[3]

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But as an adult, such opportunities to hone your analytical skills no longer apply. That’s why you need to devise a more deliberate, active approach yourself.

Below are a few strategies to get you started:

1. Ideate Business Ideas

Developing a profitable business idea, whether you pursue them or not, involves numerous challenges. You need a ton of research, computations, and problem-solving to create a tangible business plan.

You can organize your ideas with a note-taking tool like Microsoft OneNote or Evernote. Doing so will allow you to delve deeper into your analysis, organize your findings, and stay focused on roadblocks as well as how to solve them.

2. Leverage Analytical Tools

Aside from note-taking tools, you can also leverage other software that can help with analytical tasks. A money management app like Mint, for example, makes it easy to track your spending habits as well as manage your budget with visual tools. When it comes to prioritizing goals, you can use simple task management apps like Trello or Wunderlist.

3. Have a Personal Learning Library

Thanks to the internet, there’s a colossal amount of resources you can utilize to learn new skills, expand your vocabulary, and train your visualization muscles.

Social media networks like SlideShare and YouTube, for example, offer mountains of tutorials you can access to your heart’s content.

For a personalized learning library, you can download Instagram videos or GIFs from educational accounts like NASA Goddard and the American Mathematical Society. But if you prefer specific, technical skills, then a good place to start would be online learning platforms like Coursera, edX, and Alison.

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4. Participate in Online Communities

The internet is a great place to share experiences, opinions, and sometimes intellectual discussions with like-minded individuals. Reddit, for example, has a place or “subreddit” dedicated for every topic imaginable – from technology to entrepreneurship.

For structured debates, you can head to websites like Debate.org and let other users choose the winner via votes.

5. Seek Mental Stimulation

To keep your mind sharp, make it a habit to engage in mentally stimulating activities, such as chess, puzzles, and brain training apps. A great resource would be Lumosity, which contains dozens of cognitive games designed by teams of scientists and game designers.

6. Keep a Personal Journal

Finally, keeping a personal journal allows you to take a second look at everything that happened in your day.

Remember that writing about learning experiences lets you focus on the lesson rather than the emotion. It will help you analyze how you made your decisions, why you came to certain conclusions, and what you can do to improve in the future.

Here’s How to Create a Habit of Writing in a Journal.

Bottom Line

As an adult, you are required to face a myriad of challenges on a daily basis. Work, school, business, relationships – the list goes on when it comes to the sources of life’s problems. With analytical skills, you can confront and overcome any obstacle standing between you and your goals.

More Success Skillset

Featured photo credit: Campaign Creators via unsplash.com

Reference

[1] M. S. Ramaiah University of Applied Sciences: Analytical Thinking?
[2] KD Novelties: Why You Should Read Classic Tales to Your Children
[3] Economic Inquiry: The Effect of Education on Cognitive Ability

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