10 Hidden Facts about Bank Returns

Bank returns may seem straightforward, but there are hidden facts many overlook. First, nominal returns don’t account for inflation, reducing real gains. Interest is often compounded annually, not monthly, affecting long-term growth. Taxes on interest earned can further reduce returns. Introductory high rates may drop after a fixed term. Some savings schemes have lock-in periods with penalties for early withdrawal. Returns on fixed deposits vary by tenure and customer type. Banks may auto-renew deposits at lower rates. Also, returns differ based on the compounding frequency. Lastly, banks adjust rates frequently based on RBI policies, affecting future earnings.