The RBI recently deregulated the interest rates on savings account deposits, which means that the banks are now free to set the interest rates they want instead of the 4% that was fixed for all banks earlier.
Many banks have decided to raise the interest rates on savings account to 6 % p.a.
The interest rates for all savings accounts with less than Rs. 1 lakh will remain uniform.
This means that the interest rates may differ from bank to bank, each shall have the same interest rates for accounts below Rs 1 lakh.
Banks are allowed to offer different interest rates on savings account to amounts above that threshold, this allows them to create a multi tiered system where they can offer different interest rates to each tier.
This announcement is bound to increase competition between banks to attract more customers to them by increasing the interest rates on savings account.
New banks and banks with lower CASA (Current Account Savings Account) ratios shall try to aggressively attract more customers.
After this announcement as of 4th May 2012 the following banks have increased their interest rates on savings account.
| No | Bank | Interest Rates Under 1 lakh | Interest Rates Above 1 lakh |
|---|---|---|---|
| 1 | Saraswat Bank | 6.14% p.a.* | 6.14% p.a.* |
| 2 | Yes Bank | 6% p.a. | 7% p.a. |
| 3 | IndusInd Bank | 5.5% p.a. | 6% p.a. |
| 4 | Kotak Bank | 5.5% p.a. | 6% p.a. |
| 5 | Ratnakar Bank | 5.5% p.a. | 5.5% p.a. |
*Saraswat Bank announced that it would offer 6% interest rates on savings accounts which will be payable every quarter and thus effectively paying 6.14% p.a.
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Great post with lots of impaorntt stuff.
Hello! Just want to say thank you for this interesting article! =) Peace, Joy.