Savings Bank Deposit Interest Rate to go up | Deregulation of interest rate for savings bank

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Deregulation of Savings Bank Deposit Interest Rate – Guidelines
1. Please refer to our Directive DBOD.Dir.BC.89/13.03.00/2010-11 dated May 3, 2011.
2. As indicated in the Second Quarter Review of Monetary Policy announced on October 25, 2011, it has been decided to deregulate the savings bank deposit interest rate with immediate effect. Accordingly, the following Guidelines will be effective from October 25, 2011:
• Banks are free to determine their savings bank deposit interest rate, subject to the following two conditions:
• First, each 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.
• Second, 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.

3. The above revised Guidelines would be applicable to savings bank deposits of resident Indians only.

4. 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.

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