Some time back I had written about the fact that the RBI was thinking about making the savings bank interest rates to be linked to Market realities.
Yesterday in it's third quarter review they have made it a reality. Now no longer would you need to earn a measly 3% rate of interest on your spare funds, which banks use to lend out money at 12%!
As soon as the news came out yes bank raised the sb interest rates to 6%!
today we had a big advertisement in the TOI financial pages
As soon as this news hit the markets the smaller banks shares zoomed while the larger banks like hdfc, sbi all fell by 2-3%. The reason being that they have a lot of people who keep money in an sb account and hence their costs of fund are much lower.
So what do we do now?
Clearly we need to go to the banks which will give us the highest return on our deposits.example YES bank.
However things will not be as rosy as they seem. We will need to continue to monitor the sb rates since they are Market linked.
Banks may just give you a higher interest rate to lure you to become their customer, but may change them and make them lower later- it's not that easy to keep changing banks!
Also in some countries because of the credit being excess ( us , Canada) banks are actually charging money to customers for keep money in their saving accounts - far fetched thought for people in India and in an economy that is facing high inflation risks.
Right now- move to the banks that give you a higher rate.
older posts:
http://simplefinancialsense.blogspot.com/2010/06/optimize-your-sb-accounts.html
http://simplefinancialsense.blogspot.com/2010/06/optimize-your-sb-accounts.html
http://simplefinancialsense.blogspot.com/2010/02/free-interest-your-money-doubled.html
Smart investing
( Don't forget to subscribe using the links on the right)
Yesterday in it's third quarter review they have made it a reality. Now no longer would you need to earn a measly 3% rate of interest on your spare funds, which banks use to lend out money at 12%!
As soon as the news came out yes bank raised the sb interest rates to 6%!
today we had a big advertisement in the TOI financial pages
As soon as this news hit the markets the smaller banks shares zoomed while the larger banks like hdfc, sbi all fell by 2-3%. The reason being that they have a lot of people who keep money in an sb account and hence their costs of fund are much lower.
So what do we do now?
Clearly we need to go to the banks which will give us the highest return on our deposits.example YES bank.
However things will not be as rosy as they seem. We will need to continue to monitor the sb rates since they are Market linked.
Banks may just give you a higher interest rate to lure you to become their customer, but may change them and make them lower later- it's not that easy to keep changing banks!
Also in some countries because of the credit being excess ( us , Canada) banks are actually charging money to customers for keep money in their saving accounts - far fetched thought for people in India and in an economy that is facing high inflation risks.
Right now- move to the banks that give you a higher rate.
older posts:
http://simplefinancialsense.blogspot.com/2010/06/optimize-your-sb-accounts.html
http://simplefinancialsense.blogspot.com/2010/06/optimize-your-sb-accounts.html
http://simplefinancialsense.blogspot.com/2010/02/free-interest-your-money-doubled.html
Smart investing
( Don't forget to subscribe using the links on the right)
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