Cheers, starting today, Indian Banks can decide the Interest on Saving Bank deposits.
This has widely discussed at various levels i.e bank customers, bankers, Indian Bank Association meetings, RBI meetings and conferences and finally today, RBI has freed the Interest on Saving Bank deposits.
The relevant notification is RBI/2011-12/233 DBOD.Dir.BC. 42/13.03.00/2011-12 dt.October 25, 2011
All Scheduled Commercial Banks
It can be viewed @
At present the notification is not for RRB’s, but for RRB’s, a similar notification is expected in few days.
The Banks are free to determine their savings bank deposit interest rate, but subject to the following two conditions:
01) The bank will have to offer a uniform interest rate on savings bank deposits up to Rs.1 lakh, irrespective of the amount in the account within this limit.
02) For savings bank deposits over Rs.1 lakh, a bank may provide differential rates of interest, if it so chooses, subject to the condition that banks will not discriminate in the matter of interest paid on such deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices.
The above revised Guidelines would be applicable to savings bank deposits of resident Indians only.
The interest rate on Non-Resident (External) Accounts Scheme and Ordinary Non-Resident Deposit under savings account, which has been prescribed at 4 per cent per annum at present, will continue to be regulated until further review.
Over the next couple of months, I will be adding various tit-bits on the developments in this new banking frontier. This is a completely new field, both for the Bankers as well as the bank customers.
YES Bank, is the first Bank to announce the hike in Saving Bank Deposit Rate to 6%.
Keep Saving folks.
Well, the Indian Posts also has considerable balances under it’s PostOffice Savings Account Scheme. Currently, the ROI on Post Office Saving Balances is still 3.50% and with today’s news, there will be further strain on the Post Office Saving Balances.