How the Banks "FOOL", sorry "RULE"

Have your ever given a 10 Rupees note to a bagger ?, for most of us the answer is no. Most of the times we give nothing, somtimes 1 or 2 Rupees. But we are giving thousands of Rupees to banks yearly, irony is we are totally unaware about it. Lets see how ........

First of all a basic rule about interests given by banks on saving bank accounts to customers.

"Interest will be paid on amount which is deposited on or before 1oth day of the month and not withdrawn till end of the month"

Interesting, and now how it works for banks.

Suppose you have deposited 10,000 Rs in bank on 5th July and you withdrew 5000 Rs on 31 July, although you have withdrawn amount on last day but you will get interest only on 5000 Rs. If you have deposited some amount on 11th July and not withdrawn till the end of month in that case you will not get interest on that amount for month July. Hope you are getting my point now. Many people are aware about this and banks save crores of rupees in such transactions.

Crazy, now how we can save our hard earned money.

We all have lot of bills to pay these days like credit card bills, mobile bills, broadband bills, electricity bills etc. There is always 20 days time period to pay that bill approximately. Let your billing period is 15th July to 5th August and total bill amount is Rs 5,000. If you will pay your bill inbetween 15th July to 31st July then you will loose interest on Rs 5000 and you will not get any benefit of early bill payments and if you will pay your bills on 1st August then you will get intrest on Rs. 5000 and your bills will also be paid on time without fine.

In USA most people pay thier bills in last days only to get this benefit, in India also many people pay thier bills on last day but reason is different.

Some calculation now, in above case you will save Rs. 50 monthly approximately. Amount sounds very small. Some more calculations, if you will save this small amount which only needs your little planning you will have around Rs. 20,000 extra in 20 years. This amount is minimum possible and it can be as high as Rs 50,000 as our expenditure is much more then I stated.

Here i have taken only small amount but when we invest large amount like when we buy mobiles, cars, electronic gudgets, or paying our home EMI, just by little care and planning, we can save few thousand bucks yearly.

Few steps to get this unknown money -

1. Plan your bill payments well in advance and always pay in last days of billing period.

2. Try to avoid month end shopping or expenditure.

3. Do not transefer money from your one account to another inbetween 11th to end month, if you really do not need it badly.

4. Use automatic bill pay, given by various credit card companies wherever possible to plan payments better.

5. Use your credit cards intelligently to get one month extra interest.

6. Try to avoid any type of bill payments in last days of a month, where you will not be fined.


Enjoy your Money. Value your Money.

Lets Rule the banks !

Happy Saving.

Note: Your comments and feedback is most welcome.