Savings bank account rates may soon get deregulated and thus start earning more for the customer. Currently while all savings accounts earn a fixed 3.5% interest for the customer, with deregulation, they might start earning returns in the range of 4% to 6% per annum.
However, with deregulation, one prospect may also be that the interest rates for savings account dip below the 3.5% mark.
Regulator, Reserve Bank of India has brought out a discussion paper in this regard yesterday.
If deregulation sets in, it will aid in improving the transmission mechanism of RBI. In this way banks will also have to move savings bank rates according to the policy rate movement guided by RBI.
Banks are however not in agreement with this idea of the apex bank.