This project has been written

systematically in accordance with the

prescribed syllabus provide by council of the
“Indian school certificate ” (ISC) for class XII.In
this project work every effort has been made
to cover each and every aspect in the subject
of ENGLISH LANGUAGE. Every attempt has
been made in this project to make it
purposeful and intresting the language of the
project is simple and all the relevant
information has been incorporated to
improve the explanatory value this project.
TO MAKE THIS PROJECT clear and accurate.
THE HELP IS TAKEN FROM Various
website,journals,books have been contracted
to make this project precise.(THIS LINE IS
ONLY FOR COMMERCE )
AT LAST I WOULD LIKE TO
THANKS MY SUBJECT TEACHER”Mrs.BHANU
MAM” FOR HELPING ME IN THIS PROJECT
WORK AND ALSO MY FRIENDS AND FAMILY
MEMBER’S FOR THERE KIND PARICPATION
AND HELP.
The interest rate is the amount a lender charges for
the use of assets expressed as a percentage of the
principal. The interest rate is typically noted on an
annual basis known as the annual percentage rate
(APR). The assets borrowed could include cash,
consumer goods, or large assets such as a vehicle or
building.

*The interest rate is the amount charged on top of

the principal by a lender to a borrower for the use of
assets.
*Most mortgages use simple interest. However, some
loans use compound interest, which is applied to the
principal but also to the accumulated interest of
previous periods.
*A loan that is considered low risk by the lender will
have a lower interest rate. A loan that is considered
high risk will have a higher interest rate.
*Consumer loans typically use an APR, which does
not use compound interest.
*The APY is the interest rate that is earned at a bank
or credit union from a savings account or certificate
of deposit (CD). Savings accounts and CDs use
compounded interest.
• Interest is essentially a rental or leasing
charge to the borrower for the use of an
asset. In the case of a large asset, such as a
vehicle or building, the lease rate may serve
as the interest rate. When the borrower is
considered to be low risk by the lender, the
borrower will usually be charged a lower
interest rate. If the borrower is considered
high risk, the interest rate that they are
charged will be higher. Risk is typically
assessed when a lender looks at a potential
borrower's credit score, which is why it's
important to have an excellent one if you
want to qualify for the best loans.
• For loans, the interest rate is applied to the
principal, which is the amount of the loan.
The interest rate is the cost of debt for the
borrower and the rate of return for the
lender.
• 1. Fixed Interest
• A fixed interest rate is as exactly as it sounds - a specific,
fixed interest tied to a loan or a line of credit that must
be repaid, along with the principal. A fixed rate is the
most common form of interest for consumers, as they
are easy to calculate, easy to understand, and stable -
both the borrower and the lender know exactly what
interest rate obligations are tied to a loan or credit
account.

• For example, consider a loan of $10,000 from a bank to a

borrower. Given a fixed interest rate of 5%, the actual
cost of the loan, with principal and interest combined, is
$10,500.

• This is the amount that must be paid back by the

borrower.

• 2. Variable Interest
• Interest rates can fluctuate, too, and that's exactly what
can happen with variable interest rates.

• Variable interest is usually tied to the ongoing movement

of base interest rates (like the so-called "prime interest
rate" that lenders use to set their interest rates.)
Borrowers can benefit if a loan is set up using variable
rates, and the prime interest rate declines (usually in
tougher economic times.)

• That said, if base interest rates rise, then the

variable rate loan borrower may be forced to pay
more interest, as loan interest rates rise when
they're tied to the prime interest rate.
Banks do this to protect themselves from interest
rates getting too out of whack, to the point where the
borrower may be paying less than the market value
for interest on a loan or credit.

Conversely, borrowers gain an advantage, too. If the

prime rate goes down after they're approved for
credit or a loan, they won't have to overpay for a loan
with a variable rate that's tied to the prime interest
rate.

3. Annual Percentage Rate (APR)

The annual percentage rate is the amount of your
total interest expressed annually on the total cost of
the loan. Credit card companies often use APR to set
interest rates when consumers agree to carry a
balance on their credit card account.

APR is calculated fairly simply - it's the prime rate plus

the margin the bank or lender charges the consumer.
The result is the annual percentage rate.

4. The Prime Rate

The prime rate is the interest that banks often give
favored customers for loans, as it tends to be
relatively lower than the usual interest rate offered to
customers. The prime rate is tied to the U.S. federal
funds rate, i.e., the rate banks turn to when
borrowing and lending cash to each other.
• Even though Main Street Americans don't usually get the
prime interest rate deal when they borrow for a
mortgage loan, auto loan, or personal loan, the rates
banks do charge for those loans are tied to the prime
rate.

• 5. The Discount Rate

• The discount rate is usually walled off from the general
public - it's the interest rate the U.S. Federal Reserve uses
to lend money to financial institutions for short-term
periods (even as short as one day or overnight.)

• Banks lean on the discount rate to cover daily funding

shortages, to correct liquidity issues, or in a genuine
crisis, keep a bank from failing.

• 6. Simple Interest
• The term simple interest is a rate banks commonly use to
calculate the interest rate they charge borrowers
(compound interest is the other common form of interest
rate calculation used by lenders.)

• Like APR, the calculation for simple interest is basic in

structure. Here's the calculus banks use when
determining simple interest:

• Principal x interest rate x n = interest

• For example, let's say you deposited $5,000 into a money

market account that paid a 1.5% for three years.
Consequently, the interest the bank saver would earn
over the three- year period would be $450 < x .03 x 3 =
$450.>
• 7. Compound Interest
• Banks often use compound interest to
calculate bank rates. In essence, compound
rates are calculated on the two key
components of a loan - principal and interest.

• With compound interest, the loan interest is

calculated on an annual basis. Lenders
include that interest amount to the loan
balance, and use that amount in calculating
the next year's interest payments on a loan,
or what accountants call "interest on the
interest" of a loan or credit account balance.

• Use this calculus to determine the

compound interest going forward:

• Here's how you would calculate compound

interest:

• Principal times interest equals interest for

the first year of a loan.
• Principal plus interest earned equals the
interest for the second year of a loan.
• Principal plus interest earned times interest
equal interest for year three.
• The key difference between simple interest
and compound interest is time.
• Political short-term gain: Lowering interest rates can give the
economy a short-run boost. Under normal conditions, most
economists think a cut in interest rates will only give a short term
gain in economic activity that will soon be offset by inflation. The
quick boost can influence elections. Most economists advocate
independent central banks to limit the influence of politics on
interest rates.
• Deferred consumption: When money is loaned the lender delays
spending the money on consumption goods. Since according to
time preference theory people prefer goods now to goods later, in
a free market there will be a positive interest rate.
• Inflationary expectations: Most economies generally exhibit
inflation, meaning a given amount of money buys fewer goods in
the future than it will now. The borrower needs to compensate
the lender for this.
• Alternative investments: The lender has a choice between using
his money in different investments. If he chooses one, he forgoes
the returns from all the others. Different investments effectively
compete for funds.
• Risks of investment: There is always a risk that the borrower will
go bankrupt, abscond, die, or otherwise default on the loan. This
means that a lender generally charges a risk premium to ensure
that, across his investments, he is compensated for those that fail.
• Liquidity preference: People prefer to have their resources
available in a form that can immediately be exchanged, rather
than a form that takes time to realize.
• Taxes: Because some of the gains from interest may be subject to
taxes, the lender may insist on a higher rate to make up for this
loss.
• Banks: Banks can tend to change the interest rate to either slow
down or speed up economy growth. This involves either raising
interest rates to slow the economy down, or lowering interest
rates to promote economic growth.
• Economy: Interest rates can fluctuate according to the status of
the economy. It will generally be found that if the economy is
strong then the interest rates will be high, if the economy is weak
the interest rates will be low.
• Savings Account with Highest Interest Rates
• There are a number of public sector as well as private sector
banks in India. Although each bank, generally has a different
range of interest rate for savings accounts, the rates usually
range from 2.50% p.a. to 6.50% p.a.

• Overall Range of Interest Rates 2.50% p.a.

to 6.50%
p.a.

• Highest rate for daily balance up to Rs.1 lakh RBL Bank

at the rate
of 4.75%
p.a.

• Highest rate for all types of savings accounts RBL Bank

at the rate
of 6.50 p.a.
•Savings Accounts have been the go-
to investment option for all beginner
investors. Individuals who have a
steady income by way of a salary or
any other source are the ideal
candidates for a savings account.
This type of account comes with a
great many benefits which can help
one start off on the road to savings
and gradually build their investment
portfolio. In India, most banks offer
the facility of different types of
Savings Accounts which are designed
to suit the needs of a diverse
customer base.

•There are a large number of banks in

India which offer customers the
facility of opening Savings Accounts
Some of the major banks to do so
are listed as follows:
• Regular Savings Account
• These are opened on basic terms and conditions.
• The regular savings accounts do not see regular deposits of consistent
amounts, and are the equivalent of a safe house where money is kept for safe
keeping.
• Salary-based Savings Account
• These accounts are opened by banks on the request of companies which
require a platform for payment disbursal.
• Banks offer preferential rates and terms for these kinds of accounts. When the
date of payment disbursal arrives, the bank withdraws money from the
company account and disburses the money.
• One must note that almost most salary accounts will not have a minimum
balance requirement.
• If salary is not credited for 3 consecutive months, the accounts will be
converted into a regular savings account.
• Senior Citizens Savings Accounts
• The accounts function in the very same way like regular savings accounts, but
it offers much higher rates of interest and banking privileges for senior citizens.
• These accounts will be linked to other senior citizen savings schemes for
remitting the funds from their retirement accounts or pension funds, and
consolidate all the funds under one single bank account.
• Minors’ Savings Accounts
• These accounts do not have a minimum balance requirement. A minor’s saving
account has been curated for educating children about banking facilities and
savings accounts.
• This kind of account can be opened and operated under the supervision of the
legal guardian until the child reaches 10 years old.
• After crossing 10 years old, the child is allowed to operate the account on their
own.
• Once the child reaches 18 years old, the account will be converted into a
regular savings account.
• Zero Balance Savings Account
• This account merges the features of a savings account and a current account.
• While there are limits on withdrawal amounts, you will not charge penalties if
the balance falls below the prescribed minimum.
• Women’s Savings Account
• These kinds of accounts come with special features to benefit the account
holder.
• These benefits include discounts on certain purchases, low interest rates on
loans, and a waiver on demat account charges.
• Kotak Mahindra Bank Savings Account Interest Rate
• Catering to a varied customer base, Kotak Mahindra
offers Savings Accounts for different customers based on
their residence status. For Domestic Savings Account
holders, an interest rate ranging between 3.50% p.a. -
4.00% p.a. is applicable, while for all non-resident
Savings Account holders, an interest rate of 3.50% per
annum is applicable.

• State Bank of India (SBI) Savings Account Interest Rate

• SBI offers multiple types of Savings Accounts like Basic
Savings Account, Savings Plus Account, Yuva Savings Bank
Account and more which target different levels of
customers. SBI Savings Accounts carry an interest rate of
2.70% per annum.

• ICICI Bank Savings Account Interest rate

• ICICI Bank is one of the leading banks in India to offer
multiple types of Saving Accounts to its customers like
the Silver Savings Account, Advantage Woman Savings
Account, Freedom Savings Account, Basic Savings Bank
Account and more. All of ICICI’s Savings Accounts carry a
uniform rate of interest ranges between 3.00% and
3.50% p.a. which is fixed at 4.00%.

• Yes Bank Savings Account Interest Rate

• Yes Bank offers one of the most attractive interest rates
when it comes to Savings Accounts. Having revised their
interest rates, the bank will now offer an interest rates of
4.00% p.a. for all Savings Accounts with a balance up to
Rs.1 lakh, over Rs 3 lakh and an interest rate of 4.50% p.a.
on Savings Accounts with a balance between Rs.1 lakh
and Rs.10 lakh, and interest rate of 5.5% p.a. for account
with balance more than Rs.10 lakh and less than Rs.1
crore. below Rs 3 lakh.
• Yes Bank Savings Account Interest Rate
• Yes Bank offers one of the most attractive interest rates
when it comes to Savings Accounts. Having revised their
interest rates, the bank will now offer an interest rates of
4.00% p.a. for all Savings Accounts with a balance up to Rs.1
lakh, over Rs 3 lakh and an interest rate of 4.50% p.a. on
Savings Accounts with a balance between Rs.1 lakh and
Rs.10 lakh, and interest rate of 5.5% p.a. for account with
balance more than Rs.10 lakh and less than Rs.1 crore.
below Rs 3 lakh.

• Citibank Savings Account Interest Rate

• As one of the most prominent international banks operating
in India, Citibank offers different types of Savings Accounts
to customers like the Citibank Savings Account, Citibank
Suvidha Salary Account, Citibank Savings Account for
Expatriates and more. The interest rate offered by the bank
on these savings accounts is set at 2.5%, which is earned on
the daily balance maintained and credited on a half-yearly
basis.

• Axis Bank Savings Account Interest Rate

• One of the premier banking institutions of India, Axis Bank
offers a varied choice of Saving Accounts which have been
specifically designed to meet specific sets of customer
needs. Axis Bank offers an interest rate of from 3.00% p.a.
onwards and 3.50% p.a. on all its Savings Accounts.
• IndusInd Bank Savings Account Interest Rate
• To cater to the needs of a diverse customer base, IndusInd
Bank offers a variety of Savings Accounts which have been
designed to meet different financial needs. The bank offers
an interest rate of 4% on savings accounts maintaining a
daily balance of up to Rs 1 lakh; 5% for savings accounts
maintaining a daily balance of above Rs 1 lakh but below Rs
10 lakh and finally an interest rate of 6% for savings
accounts which maintain a daily balance exceeding Rs 10
lakh.

• DCB Bank Savings Account Interest Rate

• DCB Bank is one of the leading scheduled commercial banks
which offers it’s customers the facility of opening different
types of Savings Accounts. The bank offers very competitive
interest rates on these accounts which can help the account
holders extract the maximum benefit from their savings.
Currently, DCB Shubh-Labh Savings Account holders can
enjoy an interest of 3.25% on their account.
• RBL Bank Savings Account Interest Rate
• RBL is one of the nation’s emerging scheduled commercial
banks which offers its customers the facility of customized
savings account schemes. The bank offers ranging interest
rates to savings account holders which is credited on a half-
yearly basis and varies depending on the daily balance
maintained in the account. Currently, the interest rates
offered for account with a daily balance of up to Rs.1 lakh is
4.75% p.a., 6% for account with a daily balance between
Rs.1 lakh and Rs.10 lakh. Account with daily balance above
Rs.10 lakh and up to Rs.3 crore and above is 6.5% p.a.; for
accounts holding a daily balance of above Rs lakh, it is 6.1%
and for accounts holding a daily balance of up to Rs 1 lakh,
the interest rate offered is 5.1%.

• HDFC Bank Savings Account Interest Rate

• For those looking to open a Savings Account, HDFC offers
plenty of feature-rich options. For customers to choose
from. Each account comes with some unique features and
privileges which make money management much easier.
HDFC offers an interest rate ranging between 3.00% p.a.
and 3.50% p.a. on its savings accounts which is earned on
the daily account balance and credited on a half yearly basis.

• GST of 18% is applicable on all banking products and

services from July 1, 2017 onwards.
• SBI
• SBI pays an interest rate of 5.30% p.a. for an investment
period of 5 years for all regular term deposit holders
• When it comes to senior citizens, the rate of interest paid
by the bank is 0.50% higher per annum and is 5.80% p.a. for
this tenure
• For 5-year deposits, those who are 60 years and above can
expect an interest rate of 5.80% p.a.

• ICICI Bank
• ICICI Bank pays interest at an attractive rate of 5.35% p.a.
for the 5-year tax saver FD
• For senior citizens, the rate applicable for the 5-year tax
saver FD is 5.85% p.a.
• These rates are paid for those deposits that are less than
Rs.2 crore and come with premature withdrawal option

• Axis Bank
• Axis Bank is one among the other popular and well-reputed
banks in India that offers an interest rate of 5.40% p.a. for
the FDs opened for a period of 5 years
• In case of senior citizens, an investment period of 5 years
fetches an interest rate of 5.90% per annum
• YES Bank
• The interest rate for the general public offered by Yes Bank
for fixed deposits for a period of 5 years is 6.75% per annum.
• Senior citizens will get paid at the rate of 7.50% per annum
by YES Bank.
• Investors can opt for the 5 years tax free FD or the regular
fixed deposits. The interest rate is the same for both the
FDs
• Interest will be paid quarterly or monthly

• Citibank
• An FD rate of 3.50% p.a. can be earned from Citibank term
deposits for investing for a time period of 5 years
• For senior citizens, the interest rate paid by Citibank will be
4.00% p.a.
• The bank rates are applicable for an investment amount
that is equal to less than Rs.2 crore
• The bank offers tax savings term deposit schemes as well
• HDFC Bank
• The yearly percentage gain from HDFC Bank fixed deposits
opened for a period of 5 years is 5.30% p.a.
• For senior citizens, the interest rate paid by the bank is
5.80% p.a.

• IDFC First Bank

• IDFC Bank pays an attractive interest rate of 4.50% p.a. for
fixed deposits opened for a period of 5 years
• For those who fall in the senior citizen slab, the gain
percentage for the 5-year tax saver FD is 5.00% p.a.
• Customers can choose to put their money in the regular FD
scheme or tax saver time deposit

• IndusInd Bank
• The bank offers the general public an interest rate of 6.50%
p.a. for regular term deposits opened for a period of 5 years
• For senior citizens, the rate applicable is 7.00% p.a.
 AT LAST WE CAME
TO KNOW THAT Interest rates and
bank profitability are connected,
with banks benefiting from higher
interest rates. When interest rates
are higher, banks make more
money, by taking advantage of the
difference between the interest
banks pay to customers and the
interest the bank can earn by
investing.