Savings Bank Account Deregulation
All the banks in India has to offers 3.5% interest rates for all the savings bank account holders. It is the regulation enforced by Reserve Bank of India (RBI). This regulation has been amended recently to give the exact interest rates for all the days in a month. Previously banks provided only for the last 20 days of minimum balance which will be very less for the account holders. From 1st April,2010, savings bank account holders would receive the more interest income because of these changes.
Last week RBI has announced that it would like to deregulate the interest rates for the savings bank accounts. Here deregulation means, it will not be under the control of RBI anymore. The interest rates will differ for each bank. The banks will decide the interest rates based on their financial condition and other factors. The deregulation puts more competition among the banks to attract more savings bank account holders.
Some of the facts about Savings Bank account
- Savings bank account interest rates are 3.5% across all the banks.
- Prior to April 2010, savings bank interest rates are calculated for the last 20 days of the month and taking into the consideration of minimum balance.
- Deregulation would put more pressure on the banks to increase the interest rates.
- It is expected that after deregulation, the interest rates may go up to 4.5%.
- Deregulation is on proposal stage, after the review by industry experts, RBI will formally announce the deregulation
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