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Link for below:http://www.allbankingsolutions.com/BankingTutor/Highest-Interest-on-Saving-Fund-Accounts.

shtml Highest Saving Account Interest Rates


What are Saving Bank Accounts / What are SB accounts: Saving accounts are one of the most popular deposit accounts for individuals in India. In such accounts, the depositor is normally issued cheque books and the customer is allowed the flexibility of deposits of any amount and withdrawal of funds from the account at any time. Although, most of the banks have rules for the maximum number of withdrawals in a period and the maximum amount of withdrawal, yet no bank strictly enforces these owing to competition in the banking circles. However, banks have every right to enforce such restrictions if it is felt that the account is being misused as a current account. Whether Interest on Saving Accounts is Regulated by RBI : Till 24/10/2011, the interest on Saving Fund accounts was regulated by Reserve Bank of India and it was fixed at 4.00% p.a. on daily balance basis. However, wef 25th October, 2011, RBI has deregulated SF interest rates and banks are now free to decide the same within certain conditions imposed by RBI.

Which Bank is Paying the Best Interest Rates on Saving Accounts or Banks paying best interest rates on saving bank accounts:After deregulation by RBI of the Saving Bank interest, each bank is free to fix its rate of interest on Saving Funds. On the very first day itself Yes Bank announced the increase of Saving Fund Interest from 4% to 6%. Other banks are likely to announce the changes in Saving fund interests in the near future. The following are some of the banks which are offering Best / Highest / Top / Maximum Interest Rates on Saving Accounts Best Rate of Interest Maximum Rate of Interest on on wef Saving Accounts (for balance Saving upto Rs.1 lac) Accounts (balance ABOVE

Name of the Bank / Institution

Rs.1 lac) Yes Bank Kotak Mahindera Bank IndusInd Bank The Ratnakar Bank 6.00% 5.50% 5.50% 5.50% 6.00% 6.00% 6.00% 5.50% 26/10/2011 01/11/2011 01/11/2011 01/11/2011

Click Here for :

Highest FD Rates of Banks in India

What are the guidelines issued by RBI for banks at the time of de-regulation of Saving Fund Interests : On 25th October, 2011, RBI issued the following guidelines for the banks : All Scheduled Commercial Banks (Excluding RRBs) Dear Sir/Madam, Deregulation of Savings Bank Deposit Interest Rate - Guidelines 1. Please refer to our Directive DBOD.Dir.BC.89/13.03.00/2010-11 dated May 3, 2011. 2. As indicated in the Second Quarter Review of Monetary Policy announced on October 25, 2011, it has been decided to deregulate the savings bank deposit interest rate with immediate effect. Accordingly, the following Guidelines will be effective from October 25, 2011:

Banks are free to determine their savings bank deposit interest rate, subject to the following two conditions: First, each bank will have to offer a uniform interest rate on savings bank deposits up to Rs.1 lakh, irrespective of the amount in the account within this limit. Second, for savings bank deposits over Rs.1 lakh, a bank may provide differential rates of interest, if it so chooses, subject to the condition that banks will not discriminate in the matter of interest paid on such deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices.

3. The above revised Guidelines would be applicable to savings bank deposits of resident Indians only. 4. Interest rate on Non-Resident (External) Accounts Scheme and Ordinary Non-Resident Deposit under savings

account, which has been prescribed at 4 per cent per annum at present, will continue to be regulated until further review. 5. An amending directive DBOD.Dir.BC.41/13.03.00/2011-12 dated October 25, 2011 is enclosed. Deregulation of Savings Bank Deposit Interest Rate In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 and in partial modification of its directive DBOD.Dir.BC.No.89/13.03.00/2010-11 dated May 3, 2011, the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, hereby directs that banks are free to determine their savings bank deposit interest rate for resident Indians only with immediate effect subject to two conditions. First, each bank will have to offer a uniform interest rate on savings bank deposits up to Rs.1 lakh, irrespective of the amount in the account within this limit. Second, for savings bank deposits over Rs.1 lakh, a bank may provide differential rates of interest, if it so chooses, subject to the condition that banks will not discriminate in the matter of interest paid on such deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices.

Link for below:- http://www.allbankingsolutions.com/DEPSUB1.htm

COMPARE FIXED DEPOSIT INTEREST RATES PAID BY BANKS IN INDIA

COMPARISON OF FIXED DEPOSIT INTEREST RATES BY INDIAN BANKS - 2011


(Check Highest Rate of Interest Paid by Banks in India / Maximum Rate of Interest Paid by Indian Banks. Best Fixed Deposit Rates by Banks)

Which Banks Pay the Highest Rate of Interest on Fixed Deposits in 2011 ? Best Rate of Interest on Fixed Deposits in India in 2011 ? Comparative Bank Rates in India. Latest Deposit Rates of Banks in India 2011

We give below the Highest Rate of Interest or the maximum rate of interest on Fixed Deposits in certain buckets offered by banks in India in 2011 (in the first week of November, 2011) :Name of the Bank Period of fixed Deposit Rate of Interest (%)

Lakshmi Vilas Bank (LVB)

1 year to less than 2 years

10.50

Name of the Bank

Period of fixed Deposit

Rate of Interest (%)

City Union Bank (CUB) Tamilnad Mercantile Bank (TMB) Catholic Syrian Bank South Indian Bank Dhanalakshmi Bank Tamilnad Mercantile Bank (TMB) State Bank of Travancore City Union Bank (CUB) Catholic Syrian Bank

1 year to less than 2 years 1 yr to 2 yrs

10.25 10.25

Above 15 months to less than 10.10 27 months 300 days 300 days 5 years-10 years 500 days 2 years to less than 3 years 375 days to less than 15 months 10.00 10.00 10.00 10.00 10.00 9.90

PS ; In addition to above rate of interest, most of the banks offer upto 0.5% extra to senior citizens The above chart only gives a rough idea as to which banks are offering highest rate of interest in a particular bucket on a particular date. The above banks may not be offering the best rate of interest on fixed deposits in all other buckets / periods.

CLICK HERE FOR FIXED DEPOSIT CALCULATOR


Comparing rate of interests of banks in India for last few years indicate that they have been quite volatile. In 2010, the rate of interest started again going up as banks were short of funds. In the early 2011, these have further hardened. There has been very frequent changes by not only foreign banks but also by Public Sector Banks and it becomes extremely difficult to keep updated data as most banks do not inform the media about the changes, and some even do not update their websites promptly. Moreover, now a days there are no standard buckets across all banks. Some banks are offering very high rate of interest for a particular segments based on some odd days (e.g. 333 days, 400 days; 555 days; 1111 days etc. etc.) It becomes all the more difficult to compare such rates in a single chart. Therefore, for the time being, we have withdrawn the comparative charts of fixed deposits across all maturities. After increase in repo rates in last week of July, 2011, some banks have again increased rate of interest from 1st

August, 2011 onwards. Therefore, it is advised to check up with the respective Bank before final decision is taken up for deposits. To make the life a bit easier for you, we give below the links for some major banks which will take you directly to the relevant page of interest rates of that bank.

Click Here to know : Highest Rate of Interest on Saving Fund Accounts

DIRECT LINKS FOR FIXED DEPOSIT RATES FOR MAJOR BANKS S.No. Name of the Bank

1 Allahabad Bank 2 Andhra Bank 3 Axis Bank 4 Bank of Baroda 5 Bank of India 6 Bank of Maharashtra 7 Canara Bank 8 Catholic Syrian Bank 9 Corporation Bank 10 Central Bank of India 11 City Union Bank 12 Dena Bank 13 Dhanalakshmi Bank 14 Federal Bank 15 HDFC Bank 16 ICICI Bank 17 IDBI Bank 18 Indian Bank 19 Indian Overseas Bank 20 Indus Ind Bank 21 Indian Bank 22 Indian Overseas Bank 23 ING Vysya Bank 24 J&K Bank 25 Karnataka Bank 26 Karur Vysya Bank 27 Kotak Bank

28 Lakshmi Vilas Bank 29 Oriental Bank of Commerce 30 Punjab National Bank 31 Punjab and Sind Bank 32 South Indian Bank 33 State Bank of Bikaner and Jaipur 34 State Bank of Hyderabad 35 State Bank of India 36 State Bank of Patiala 37 State Bank of Travancore 38 Syndicate Bank 39 Tamilnad Mercantile Bank Ltd 40 The Ratnakar Bank 41 UCO Bank 42 Union Bank of India 43 Vijaya Bank

Foreign Banks S No 1 2 3 4 5 6 7 8 9 Name of the Bank

Abu Dhabi Commercial Bank Bank of Ceylon Citi Bank China Trust Commercial Bank Deutsche Bank HSBC Bank Standard Chartered Bank Scotia Bank Royal Bank of Scotland

http://www.moneycontrol.com/news/economy/savings-rate-freed-how-does-it-affectyouyour-bank_612005.html
Investors following Yes Bank. Share this News with them.

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Saikat Das Moneycontrol.com Immediately after the Reserve Bank of India (RBI) de-regulated savings rate, private sector lender Yes Bank was the first one to hike its savings deposit rate by 200 basis points to 6%.

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Peers Kotak Mahindra Bank and IndusInd Bank joined the bandwagon in the next two days. So, are you planning to shift your savings account?

No doubt de-regulation of savings rate will earn you some extra bucks on account of interest rates. However, you need to take care of some other factors Share on Tumblr as well. Prior to the de-regulation, banks across the board, were offering uniform 4% (p.a) rate of interest on savings deposits. A little higher rate of interest does not necessarily prompt a shift, said Brijesh Damodaran, founder of Zeus Wealthways, a financial advisory firm. Breaking a long standing relation with your existing bank is not easy. Over a period of time, you enjoy a lot of comfort level in dealing with your bank officials. You also get accustomed with banks way of operations. Unless you have huge balance, maybe over and above Rs 10 lakh, it does not make sense to shift your savings account to a new bank offering higher rate of interest. A greater savings account balance will fetch a depositor higher interest income. In personal finance parlance, savings account money is termed as idle money. Ideally, savers should keep money equal to their 3-6 months expenditure, in their savings accounts. Clients normally do not change their savings bank account only on higher rate. There are many other factors that help in customer retention. Those are

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Consider this:

YES BANK BSE | NSE 14/11/11

loyalty, customer service and comfort level in dealing with the banks officials. We are not jumping into rate hikes like some of the banks have done, said Abraham Chacko, executive director, Federal Bank , a private sector lender. If a depositor is having multiple transaction links with his existing bank, a shift of savings bank account is not advisable. For example, if your demat account is liked to your savings and a change to a new bank will add to inconvenience. You may end up paying more transaction costs as well.
Banks Yes Bank Kotak Mahindra Bank IndusInd Bank Savings Rate (%) 6 6 5.5 - 6

What if, you are a new customer? There is no rationality for shifting your savings account on higher interest rate, said Sumeet Vaid, CEO and founder, Freedom Financial Planners. You have to see the convenience of banking in a particular bank. If a bank offers good service facilities, a new customer should go for it instead of looking at minimal rise in savings rate. There has to be a fine line between savings and investment. Do not expect good returns not from savings, but from your investment. Banks perspective Banks especially the smaller ones with lower share of current account and savings account (to total deposits) tend to plunge into rate hike war to grab market share. Yes Banks CASA ratio stood at just 11% with CASA base at Rs 4,839 crore out of total deposits of Rs 44,076 crore. Big banks may not hike rates soon as they have higher share of CASA, which will lead to increase in cost of borrowings. A 100 basis point rise in savings deposit rate would put a margin pressure of 22-25 basis points. If we go for a savings rate hike, we have to either bring down bulk deposit rates or hike lending rates to off-set the margin impact, M Narendra, CMD, India Overseas Bank told Moneycontrol.com. Does de-regulation mean only upward revision of rates? Certainly not! Global experience shows, savings rates have actually come down after deregulations. Here in India too, rates can come down.

There could be downward revision of savings rate as well.Accounts with less than Rs 1 lakh balance, are seen more of transaction accounts while accounts with more than Rs 1 lakh will be viewed as fixed deposits. In case of the former, rates may come down said Ananda Bhoumik, senior director, Fitch Ratings.

http://www.hindustantimes.com/NewsFeed/BusinessBankingInsurance/Savings-ratederegulation-what-to-do/Article1-767875.aspx Savings rate deregulation: what to do


Lisa Pallavi Barbora & Kayezad E Adajania, Hindustan Times November 11, 2011 Email to Author

First Published: 20:22 IST(11/11/2011) Last Updated: 22:46 IST(11/11/2011) Share more... 0 Comments Email print

Your bank balance is about to get a boost. Effective 25 October, the Reserve Bank of India (RBI) deregulated the savings bank account interest rate. In simple words, every bank is free to fix the interest rate it wants to pay on savings account deposits, compared with the standard 4% that they

were mandated to pay till now.

Soon after the deregulation announcement, three private banks raised savings account interest rate to 6% per annum for balances above R1 lakh and 5.5% for deposits less than Rs 1 lakh. The RBI has told banks to pay a uniform rate to all customers having savings account balance of up to Rs 1 lakh. For balances above Rs 1 lakh, banks are free to choose interest rate bands. What this means for you Many financial experts believe that its unlikely that customers would switch banks anytime soon, purely on account of higher interest rate. Moreover, if you have a salary account or your bank account gets debited every month towards your loan commitments or even for utility bills such as electricity or telephone bills, changing a bank account can get tedious. Also, the average Indian consumer has till now shown little interest in moving funds from one bank to another. This could be on account of long-standing relationships or simply the lack of any real need to do so. High networth individuals anyway move surpluses to liquid funds, said Pawan Joseph, vice-president, Motilal Oswal Wealth Management. In the case of retail customers who are not conscious about wealth management, a very small amount will shift. Moreover, the relationship with the bank and tied-in financial transactions are difficult to change. However, not everyone agrees. If other services are the same, customers will consider the benefit of higher savings rate, said KVS Manian, president-consumer banking, Kotak Mahindra Bank. Lets calculate how much a 150 basis points (one basis point is one-hundredth of a percentage point) hike in savings rate means for a Rs 50,000 balance. In a year it amounts to an additional interest of Rs 750, or Rs 63 more per month, before tax. If your bank hikes savings rate by 100 bps compared with 200 bps by another bank, and you switch banks, then you stand to earn only R83 more every month for a bank balance of Rs 1 lakh. Not a large incentive to move your account, youd say. Do they match liquid MFs? Rising interest rates for the past two years have meant that your liquid funds returns have been attractive. Between June 2011 and now, liquid and ultra short-term funds have offered about 77.5% return per annum. Further, dividends in liquid funds and ultra short-term funds are taxed at 27% and 13.5% respectively, compared with 30.9% at which your savings bank account interest is taxed, assuming you are in the highest tax bracket. A back of the envelope calculation shows that investments in liquid and ultra short-term funds would outperform saving bank interest rate if you are in the highest tax bracket. Should you, then, continue with your systematic transfer plan (STP; putting a lump sum in liquid or ultra short-term fund and then switch systematically to an equity fund)? Its a smarter strategy to remain with a liquid fund and do STP in an equity fund, said Puneet Pal, senior vice-

president and fund manager, debt, UTI Asset Management. Putting money in liquid funds give higher returns to investors compared with putting money in bank savings. Its easier also. Select banks join race Not all banks have raised rates. Banks that have raised rates such as Yes Bank, Kotak Mahindra Bank and IndusInd Bank, have relatively fewer savings accounts and hence, may be looking to attract customers who are getting lower interest rates. If and when other banks will follow is yet to be seen. This is a good reform, but it will take time to play out, said Pathik Gandotra, head, equities, IDFC Securities. Public sector banks are unlikely to raise rates as there is no reason or scope to do so. Large public banks have said that they arent in a hurry to raise rates. For State Bank of India, which has the largest deposit base, a 100 bps increase in savings rate can potentially increase their annual interest expense (for the rest of the fiscal) by 4-5% or Rs 1,400-1,500 crore. This can translate to a 15 bps or so reduction in net interest margin (NIM), if loan rates dont rise. For a bank, NIM is essentially the difference between the total interest earned and total interest paid as a percentage of total assets and it shows the average margin a bank makes by borrowing and lending funds. While this reduction may not be significant in itself, given the difficult economic environment, it will pinch the large banks. Even for private banks such as ICICI Bank Ltd and HDFC Bank with large deposit base, the effect on annual interest expense (for the rest of the fiscal) can potentially be between 3% to 5% increase. Passing cost to customers It's a given that banks that raise savings rate and incur additional costs are unlikely to absorb it and will pass it on to consumers. Banks paying higher rates will offer minimal benefits while low savings rate bank accounts might offer more benefits, experts said. What this means is that if you are getting 6% interest on your saving account, keep an eye out for the need to maintain a higher minimum balance, higher charges for cheque books, outstation cheque clearances, inter-bank transfers and so on. If banks are forced to raise rates there are going to be charges for everything, said Gandotra. Cost of service will go up as large banks will try to match each other. This hike (in savings rate) is not going to lower profit. What should you do? Dont be perturbed when you see your bank offering a 150-200 bps lower return on your savings account. If you have to open a new account then dont take only the savings account rate into consideration, but look at the services it offers and charges.

Also, remember that a deregulated saving account rate means that if rates can be higher now they can potentially be lower in a different market environment. Just like fixed deposit rates move up and down depending on policy rate, the savings rate will also adjust. We suggest you stick to your liquid and ultra short-term funds to park your surplus cash. At the same time, a deregulated savings rate should spice up your savings bank account.

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