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  • Category: Miscellaneous

    Let banks now increase the deposit rates

    When real inflation is above 7% and even RBI has increased the repo rates, it is in the fitness of things that one should be very careful now. The banks need to wake up and increase the deposit rates. Otherwise, the Mutual Funds will gather even more money and the flood that started some two years ago will go on unabated. SIP, for example, is far superior to bank deposits, and everyone is realizing that it is so.

    There needs to be pragmatic thinking among bank Managements. They cannot sit idle now. The deposit rates should at least touch 7.5%, if the banks were to do justice to the depositors, who have already suffered so much.
  • #756420
    I also feel that the banks should now increase interest on FDs, Savings accounts and RDs. But let us see how much time the banks take to reach this logical conclusion.
    “Khamosh rahoon toh mushkil hain, keh doon toh shikayat hoti hain" (It is difficult to remain silent; But if I speak, they complain.) --------- Saba Afghani

  • #756421
    The low rate of interest for the fixed deposits and other savings of the banks are offering interests which is even less than the rate of inflation and this is causing a lot of stress to the retired persons especially that they are dependent solely on this income.,
    We are witnessing a surge on all the edibles apart from hike of the petroleum products. This has made their lives stressful and hike of interest rate should be effected for all the depositors to a respectable level. Let the interest rates of fixed deposits for the senior citizens be 1% higher than the common depositors to take care of earning potentials.

  • #756428
    The banks have increased the EMI rates and there is a need for increase in deposits rate. Gone are the days when the elders used to save with the bank and post office savings account. Now they turned to the mutual funds and SIP. Those who are rich and the money is coming regularly does not have the problem but those who are existing with their interest on the deposits and monthly they have to withdraw and manage the family and expenses are the most affected. Companies which were earlier accepting FD at higher rates are now missing nor coming forward with the old schemes. Madras Motor Finance was the first to have such arrangement of 22 percent interest in those days and people happily believed and made the deposits.But such companies closed due to RBI pressure as the banks were not getting the deposits.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #756440
    I agree with the author. The money is going more into mutual funds as the returns are very attractive than the bank FD rates. The interest rates on FDs are even less than 6%. Banks should give serious thinking to this aspect. Otherwise, people will cancel their FDs and go for MFs.
    Yesterday, I met a friend. He has a son and a grandson. My friend gave Rs.1,00.000/- as a gift to his grandson on his first birthday. My friend advised his son to deposit that money in a bank as an FD. But his son told him that he will put the amount in MFs but not as an FD. My friend told me this.
    This is an example that the thought process of the people is also changing. The banks should not delay this and should act at the earliest and take a decision on this. RBI should advise all banks on this matter and see that banks will respond positively.

    drrao
    always confident

  • #756457
    Banks periodically change the deposit rates based on the monetary policies and prevailing market and business conditions. Now RBI has just announced an increase in the repo rate and it is obvious that if RBI does it for a few times more then Banks will start increasing the interest rates on the loans as well as on deposits. That will hurt the people going for loans but would certainly help the seniors who are surviving simply on the interest from their Bank deposits. Once interest rates look up then they would increase till the economy stabilise and then RBI again goes for correction in the reverse direction. So these cycles of increase and decrease of interest rates would go on like that depending upon the inflation and RBI's monetary policies.
    Knowledge is power.


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