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Q.

From April 1, 2010 banks will be paying interest on SB accounts on a daily basis. But the impact of this to the account holders may not be significant as the interest rate is very low for SB accounts and the money kept in the SB accounts also not that high.Then what is the idea behind this move? Your views?

Asked by Good Citizen, 01 Apr '10 12:03 pm
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Answers (4)

1.

Sai Ram. It is true that many of the savings accounts won't have much interest but there are special accounts where you need to maintain a minimum balance of say 2500, 5000 or even 10000 rupees in savings account. The bank has to pay interest in such cases too and there the impact could be significant. It is expected that the interest outgo for many banks is expected to increase by about 16% because of this change. Many small businessmen don't maintain current accounts and in their case, this move will definitely improve their interest income.
Answered by Venkateswaraswamy Swarna, 04 Apr '10 12:36 pm

 
  
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2.

It may appear to have very less impact and may not look significant to each individual going by the amount that normally people keep in their Savings Account, for many it is a credit at the disburement of salary and a series of withdrawals after that till the next month's credit. So, for some one, let's say who gets a salary of 25,000 credited to the account, and which is withdrawn periodically, it might amount at best to something like getting an additional Rs. 30 to 40 per month based on the SB interest rates.

But there are also substantial number of elderly persons in this country who do not believe in blocking their money in different intstrments of investments including FDs for the reason that, they always anticipate an emergency where they can quickly pull out the money. One must remember that, a whole lot of these population mentioned remains in other parts of the country and may not have access to the same kind of facility like in metros and may even be averse to using cred ...more
Answered by Omega, 01 Apr '10 01:27 pm

 
  
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3.

I fully agree with you.But as of now the interest was paid on the minimum balance in the account between the 10th and the last day of the month.Sio even if sime money was deposited in the account on11th of the month, no interest would be earned for that month on that amount.Though the gains may not be substantial but will be at least better than what people were getting earlier.And something is better than nothing!
Answered by HEMANT MEHTA, 01 Apr '10 12:08 pm

 
  
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4.

Yes in banks low cost deposits may go up people would save more money in SB a/cs. For loans interest charged would be on total no of days and so why not Savings a/cs...And no w attitude of customers to invest in sb may change they may save more ...and ...for banks they have to think of other options like to open more current a/cs where no interests is being given...
But many banks are also thinking of other ways for betterment and now we have to see how all goes..in later years..
Answered by sarya mitra, 01 Apr '10 10:35 pm

 
  
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