It varies from one bank to another bank

Normally, they charge one or two percent more than the interest payable for the deposit.

However, neither the bank employees nor the customers pay attention to the following aspect:

Let us imagine this situation:

You have one deposit for rupees 10.00 lakhs at rate of interest 10% p.a. deposited for a period of two years

You avail a loan for rupees five lakhs and the rate of interest to be will be 12% p.a.

Suddenly
you are willing to close the deposit before maturity after completion
of six months from the date of opening the deposit and the interest
payable for this is 8 percent p.a.

The deposit
along with interest at the rate of 8 percent for the period of six
months is paid to the depositor after adjusting the loan amount

How much interest rate is applicable for the loan?

Normally the interest rate should be 10 percent - two percent more than the rate of interest paid to the deposit

Alas

The
bank charges interest at the rate of 12 percent as originally recorded
and they are not reverting to the new interest rate structure at 10
percent

It may not be on account of their ignorance or negligence

This point has to be noted by the readers for their future guidance

https://www.quora.com/What-is-the-interest-rate-for-a-loan-on-a-fixed-deposit

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