Wednesday, August 23, 2017

Banks are cutting interest rate on savings account: What to do now

Knowing Minimum average balance requirement of your bank savings account is important because ideally you should only keep emergency funds in the savings account and move the rest to liquid debt mutual fund or other investments yielding higher returns. 

This has assumed greater importance in the wake of a large number of banks cutting interest rates on savings accounts which means that unused funds lying idle in these will earn even less than before. This move by banks has brought the need to optimise the amount of funds kept in bank savings accounts into sharper focus. 
Since October 2011, most banks barring few private banks were offering interest rate of 4 percent in these savings accounts. However, recently, banks have started reducing interest rate on savings account. 

The first salvo was fired by none other than the country's largest bank. On 31st July, 2017, State Bank of India slashed its interest rate on savings account deposits by 50 basis points to 3.5 per on balance of Rs 1 crore and below. Subsequently, eleven more banks have reduced the savings bank account interest rate and more could be expected to follow soon. 

Here are some of the banks that have reduced rates from the earlier rate of 4 percent for most deposits. 

Differentiating features in savings account 

According to RBI rules, interest on savings account (for resident rupee accounts) shall be calculated on a daily basis and will be a uniform interest rate on balance up to Rs 1 lakh, irrespective of the amount in the account within this limit. Also, banks may offer differential rates of interest on balance above Rs 1 lakh. 

Therefore, a bank may have a specific rate up to Rs 1 lakh, while a different rate for balance between Rs 1 lakh and Rs 50 lakh or Rs 1 crore. Some banks do not differentiate and may have a flat rate up to Rs 50 lakh or Rs 1 crore. Therefore, choose to go with a bank based on the average balance being maintained in your account. 

The interest in the savings account of scheduled commercial banks is calculated on daily basis and is credited to the account on quarterly basis. The banks are allowed to credit interest at shorter interval too. 

Banks may insist on maintenance of a monthly average balance (MAB). If the average is not maintained at the end of that period, there could be a penalty. As a savings bank account holder, one needs to keep an eye on the average balance limits as set by the bank. Some banks have a low limit of Rs 1,000 while some may have Rs 5,000. 

In addition there could be several other differentiating features like a higher limit for free usage of ATM etc. 

As the minimum balance requirement of bank savings account has to be met to avoid penalties therefore one should know how it is calculated in order to ensure that this requirement is met while optimising the amount of funds kept in a savings account. 

Monthly Average Balance: Calculation 

Here's how to calculate the monthly average balance for bank savings accounts: 

Say, a bank asks to maintain Rs 5,000 as monthly average balance. 

Let's say how MAB will be calculated for August. 
On 1st August, the balance in the account is Rs 4,000
On 12th August, withdrawal of Rs 3,000 take place
On 18th August, deposit of Rs 9,000 takes place 
From 1st August to 12th August i.e. 11 days, total balance will be Rs (4000*11) = Rs 44,000 

From 12th August to 18th August, total balance will be Rs (1000*6) = Rs 6,000 

From 18th August to 31st August, total balance will be Rs (10000*13) = Rs 1.3 lakh 

So, total balance comes to Rs 1.8 lakh and the average for 31 days will be Rs 5,806, which is above the required limit and hence no penalty will be levied. For calculating the number of days, it is based on day's closing balance. 

Conclusion 

Keeping idle funds in the savings account should be to take care of emergency needs. Most financial planners suggest keeping at least 6 months of household expense as emergency funds. One may keep an amount equal to three months of such needs in savings account and the rest in short term or liquid funds. 

In order to reduce their cost of funds, banks have started offering lower interest rate in their savings account. As an account holder, it's time for you to take an equally informed decision to divert funds from savings account to high yield investments to make your liquid money earn more. 

Source:-The Economic Times

ONE DAY STRIKE 23rd AUGUST-2017

A GRAND SUCCESS
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Congratulations and Revolutionary Greetings to all General Secretaries, NFPE Office Bearers, Circle/Divisional and Branch Secretaries of All Unions of NFPE including GDS Union for making One Day Strike on dated 23.08.2017, a Grand Success.

After a long gap, NFPE has conducted strike alone and only for settlement of Postal Sectional demands and it is made grand success by our Comrades.

Out of 10 demands, three demands have already been settled by the Department. 
One demand, Declaration of result of membership Verification has been submitted to Minister (C) by Secretary (P) for approval.

GDS Committee Report:- Some queries were raised by the Finance Ministry and reply has been sent by the department. It will be implemented very soon.

On other demands Department has started action.

The Position of strike, Circle wise is placed below:

VERY GOOD
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Kerala, West Bengal, Maharashtra, Assam, North East, Tamilnadu, Odisha, Jharkhand, Chattishargh.

GOOD 
""""""""""""
Telangana , UP, M.P., AP, Punjab, Haryana, HP , Bihar

AVERAGE/PARTIAL 
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Delhi, Rajasthan, Uttarakhand, J&K , Karnataka , Gujarat


R.N. PARASHAR
SECRETARY GENERAL
NFPE

GDS Strike w.e.f 16.08.2017 Call off by AIGDSU


Arunachal to have 9 IPPB branches

Itanagar, August 19 (PTI): Arunachal Pradesh would have nine branches of India Post Payment Bank (IPPB), a PSU bank under the Department of Posts.

Out of the 47 IPPB branches for North East, Arunachal Pradesh would have nine, Director of Postal Services (Headquarter) Som Kamei said here today.
IPPB branches would be set up in all the district headquarters — Changlang, Pasighat, Roing, Ziro, Tawang, Namsai, Bomdila, Aalo and Itanagar.

“With the introduction of IPPB in the state, interior people who do not have bank accounts would be connected to digital banking facility,” Kamei said.

IPPB has been launched on January 30 in Ranchi and Raipur with the objective of being present in all corners of the country by the end of the year.

Kamei also released a special post card on Arunachal Pradesh.

“The department of post’s endeavour is to highlight all aspects of tourism in the state through this special post card,” he said.

AIAPS is not participating in the proposed one day strike on 23.8.17

AIAPS association is not being the part of tomorrow's one day strike on 23.8.17 proposed by some unions.

Hence all the Postmasters are requested to open their office to work as usual.

_AIAPS(CHQ)

IP ( Departmental ) Induction Traning at Darbhanga w,e,f 04.09.2017 to 01.12.2017

GDS Strike on 21.08.2017


Know the Rules - Department of Posts

Whether payment of SB and Savings Certificates can be made by transfer to POSB account of the claimant(s) or payment has to be made by crossed cheque only ?
Answer:- Payment can be made by transfer to posb account also Para 6 of SB order no. 12/2015
After implementation of Cadre restructuring , Time scale offices are manned by LSG/HSG officials as the case may be. Whether the limits prescribed under no nomination and no legal evidence is based on offices or SPMs ?
Answer:- The limits are based on offices only.
What is the balance that should be taken for the purpose of limit of various offices prescribed in case of SB Death claim without nomination and without legal evidence ?
Answer:-The amount of balance as on the date of death of the depositor (including interest up to previous financial year should be considered for the purpose of limit prescribed for various offices) and not balance as on date of claim

APPEAL TO ALL GENERAL SECRETARIES, CIRCLE SECRETARIES/DIVISIONAL AND BRANCH SECRETARIES OF ALL NFPE UNIONS

APPEAL TO ALL GENERAL SECRETARIES, CIRCLE SECRETARIES/DIVISIONAL AND BRANCH SECRETARIES OF ALL NFPE UNIONS
 
MAKE ALL POSSIBLE EFFORTS TO MAKE ONE DAY STRIKE
ON 23.08.2017

A GRAND & HISTORIC SUCCESS
LEAVE NO STONE UNTURNED

FOR SETTLEMENT OF 10 POINTS CHARTER OF DEMANDS

1. Filling up of all vacant posts in all cadres of Department of Posts i.e. PA, SA, Postmen, Mailguard, Mailmen, MTS, PACO, PASBCO, Postal Accounts and GDS.

2. Implementation of positive recommendations of GDS committee Report. Grant of Civil Servant status to GDS

3. Membership verification of GDS and declaration of result of regular employees membership verification.

4. Stop all types of harassment and victimization in the name of new schemes and technology induction and under contributory negligence factor and Trade Union victimization.

5. Payment of Revised wages and arrears to the casual, part-time, contingent employees and daily rated mazdoors as per 6th& 7th CPC and settle other issues of casual labourers.

6. Stop Privatization, Contractorization and outsourcing.

7. Implement cadre Restructuring for leftout categories i.e. RMS, MMS, PACO, PASBCO, Postmaster Cadre Postal Accounts etc. and accept the modifications suggested by Federation before implementation of cadre restructuring in Postal Group ‘C’.

8. Provision of CGHS facilities to Postal Pensioners also as recommended by 7thCPC.

9. Withdraw NPS (Contributory Pension Scheme). Guarantee 50% of last pay drawn as minimum pension.

10. Implement five days week working for operative staff in the Postal department.


R.N. PARASHAR
SECRETARY GENERAL
NFPE

GDS STRIKE IS CALLED OFF - AIGDSU