Till now, savings bank accounts fetched 4% per annum. The RBI said each bank will have to offer a uniform interest rate on savings deposits up to Rs 1 lakh, irrespective of the amount in the account within this limit. For savings account deposits over Rs 1 lakh, a bank may provide differential rates of interest, if it so chooses.
However, there should not be any discrimination from customer to customer on interest rates for similar amount of deposit, the RBI ordered — so expect more interest rate slabs to come up based on the size of deposits.
Analysts said banks with less ‘CASA’ or current account-savings account deposits with them will offer more interest rates. By Tuesday evening, Yes Bank, which has only 3% CASA deposits, announced it will offer 6% interest rate on savings accounts to lure retail customers.
Among the big banks, a lot depends on what the State Bank of India does as that will set the tone for the market. “If SBI does not necessarily increase the savings deposit rate then I do not see the savings deposit rate going up across the industry,” said Suresh Ganapathy, head of financial research team at Macquarie Securities.