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  • Category: Miscellaneous

    The deposit rates need to be increased

    The Modi administration is extremely notorious for reducing interest rates on deposits; it has seldom if ever, allowed the deposit rates to be increased, even if the economy was seen to be moving in the right direction. This has done maximum injustice to the common man. All advice of world-class economists to allow the increase the deposit rates have fallen on deaf ears. In the BJP, they have one Dr.Subramaniam Swami, who is a simply world-class economist. He had openly advocated an increase in deposit rates. This has fallen on deaf ears and someone who is not even a pale shadow of the brilliant Dr.Swami is the Finance Minister. She never listens to anybody.

    The senior citizens and the common people deserve more than what they have now. They cannot be puppets in the hands of the Government. The deposit rates should be increased immediately and this will mean increased money in the hands of people, who will at least keep buying more things, even if it were to give some fillip to the unorganized sector. For example, if I can get a good, but the local brand of potato chips for the same cost, but with a larger quantity than the organized Lays, which comes from Pepsico, I will settle for the former. But I need the money. And for this, the deposit rates have to increase.
  • #717197
    I agree with the author interest rates on saving is too low and need to be increased for the common people.

    There is a general tendency for interest rates and the rate of inflation to have an inverse relationship.In general, when interest rates are low, the economy grows and inflation increases. Conversely, when interest rates are high, the economy slows and inflation decreases. So in order to have low inflation interest rates should be increased.


    " The two most important days in your life are the day when you are born and the day you find out why? "
    – Mark Twain

  • #717198
    Interest rate is continuously going down and bank account holders can do nothing in this matter. This is what RBI decides, more aptly- what government decides- banks abide by their orders.

    The way policies are changing, soon I see , interest rate will be scraped off from bank account.
    Billions of NPA has been written off. Now, interest is not important but safety and security of account holders' money is an important issue.

  • #717212
    Interest rates of banks are too low at present than for what we used to get double in the past. RBI has to see that the interest rates are becoming too low and the cost of living escalating. We have to pity old people where so many depend on the interests what they keep it as FD. Sr. Citizens or retired people at the age of 55 and above can make use of the PM via the yojana scheme where their fixed deposits for 5 years are giving 7.4% paid quarterly interest in banks and post offices. I heard in LIC also for Sr.citizens 10 years deposits 7.4%. These are the only two options for old people to get the maximum interest rate at present. Are there any other options to get more interest for the common man at present?

  • #717216
    Interest rates have gone quite down during the past decade. It has happened gradually and from about 9% it has now come down to 5.5% (6% for seniors). If I remember correctly the interest rates were at about 12 to 13% during 1990-95 era (about 27 years back). So what has happened is that due to economic stabilisation and development of the country the loan rates and FD rates both came down drastically. Today, it is not only the FD rates which came down but also the loan rates also has come down. If the economy goes up further and the nation develops in many areas, having more agricultural production, with same speed and momentum then these rates may still go down to 3 to 3.5% soon. This is definitely a big problem for those seniors who have no pension and are dependent on the interest of FDs. Some people had invested their money in making extra house or flat and now they are getting rent from that and are better off than those who kept their retirement funds in bank.
    There is a theory that if inflation is controlled and rates of some essential items do not increase which means that supply is more than the demand then bank interest rates would go down. So, if the essential commodities rates do not increase significantly, people would not mind the decrease in interest rates.

    Knowledge is power.

  • #717218
    True. Interest rates are coming down drastically. In the same way, the lending rates are also coming down. Housing loans, vehicle loans and other loans are cheaper now. In the same way, the interest they are giving for deposits is also less. Many senior citizens who kept their money in banks as FDs are suffering a lot. They are getting less interest. But the rates of essential commodities are increasing. If the rates of these essential items like food items, milk and milk products, vegetables and fruits are coming down means the senior citizens may not have any problem even though the interest rates are less. But these prices are not getting reduced. A real problem to the people.
    If the rates of interest for deposits are to be increased means, the rates on loans should also be increased. Otherwise, the money will not be in circulation and banks have to face problems. The Central government has to think and come out with a good strategy on this issue.

    always confident

  • #717259
    In this respect, I too not happy with the interest rates. It is not the BJP government, but also the UPA government which has reduced the interest rates. There was a time when money used to be doubled in 5 years. Now it requires more than 10 years to get doubled. This has made many old people whose life is dependent on their deposits to suffer in their life. Certainly, our government should increase the interest rates for fixed deposits, especially for the senior citizens. It should not be less than 10 percent.
    A lady can never do it. They think of saving only. If person like Dr. Swamy is made FM, it would be possible.

    No life without Sun

  • #717270
    There are two sides for the same coin.
    Is it not equally true that the government (and so RBI and Banks) is continuously reducing interest rates on loans?
    Unfortunately these do not help us, the 'oldies'. As we are senior citizen and retired people we depend on deposit interest income. So as the interest rate on deposit becomes reduced, we get less income. Quite unfortunately when we were in employment also we suffered as the loan interest was very high then. I had to pay eleven percent or more on my housing loan. I had to pay 12 percent and more on my son's education loan. Hence we were like a "Maddalam"(a percussion instrument" getting beaten on both sides.
    However, now in our country the business lobby is very powerful and vocal. So they always clamour for lower interest to make more people borrow money in various forms. The government naturally is pressurised (even by powerful external countries with business interest) to reduce interest rates and make availing loan more easy and tempting. Moreover the stock market is projected as wealth creator and high return giving. This is another clever ploy by the same business and corporate lobbies. All the sponsored writers and scribes also lend support and propaganda to this.
    Thus,the retail saving people loose in every way. They lose as they do not get good interest. Banks collapse as big borrowers cheat banks and escape. The poor depositing people lose their money. Stock market manipulations are done and big people corner all gains and leave the retail investor remains cheated. He is being drawn into temptation by some small gains initially extracting his precious money into market. While one million retail investors may lose one rupee each, the manipulator gains one million in a single day or dealing. The poor person then lick their wounds ad innocently feel it is market fluctuation. Again he is ready for another investment and another cheating.
    Unless and until there is a cap for profits by big business, this scene will continue. Depositors should also be treated as business and should get at least 10 percent return. Net of tax, now, bank deposit interest return is negative. Poor savers are losing their capital slowly without their knowledge.
    That is why I support expense tax and not income tax. Let those who spend more be taxed more.

  • #717272
    It is true that the long term deposits and savings in the banks are attracting very less interest and the elders who were induced with .5 percent of more interest are now left in lurch as their monthly interest has gone down and they cannot invest anywhere as there is no guarantee of any other source of regular income. I fail the understand that the banks thrive on the deposts of people and they are giving lesser interest. Gone are the days when the banks were giving nearly 10 percent on the deposits and now it is hardly 6 percent and on the savings account the interest is just 3 percent and more.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #717283
    A few rules were made during lockdowns. One of them was PF to all employees for three months. Similarly this thought of reduced the bank balance should also be stopped after a stipulated time frame. First of all, many employees are sufferring due to half, quarter od no salary at all. They have taken.lians from banks, pledged documents, utilised the saved money and so on. If Government does not increase people msy have to face the consequences. Secondly, many villagers and common people are educated and have leart who have the knowledge of banking procedures.
    Lead the leader

  • #717358
    In some developed counties deposit rates are around 2-3% only and seeing the present trend it is obvious that we are also proceeding to the same situation. But for that we should progress in other respects also like inflation should be checked at a minimum. Jobs should be plenty and here is should be some scheme for the senior citizen that they get the state pension in some form or another. If such situation comes and facilities are generated then no one will mind the reduction in the interest rates especially in the bank or Post office deposits which are the main places where people keep their earnings.
    Thoughts exchanged is knowledge gained.

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