Savers and depositors are in tears while borrowers are rejoicing as interest rates continue to come down, a ongoing trend over multiple years. State Bank of India has cut rates and others banks will follow. Rates on 2 and 3 year deposit rates have been reduced to below 7%, rates, which are well below the 9% and more in years past. These rate reductions and now being seeing in post office savings schemes, annual DA rates of increase, PF interest rates and annual salary increases. So why is this happening: in a good way due to lower inflation, strong economic growth, improved tax collections and surplus funds with the banks due to demonetization. As you worry about this, you should note how lucky a depositor still is, as 3 year deposit rates in some western countries are around 2% only, think about that.
Source: Economic Times
- 2 May 2017
Better watch out and plan accordingly – starting 1st April, several banks plan to impose a fee or penalty if they keep balances below the minimum average balances for each month. While the fee structure varies for metro-city, semi-urban and rural, but there is likely to some fee. Some public sector banks had stopped this practice a few years ago to build the account holder base, but they plan to resume it. Most private sector banks always had these fees and penalties.
Source: Business Standard
- 10 Mar 2017