RBI Mandates Uniform Savings Interest: Clarity for Small Account Holders
- Standardized Interest Rate for Small Deposits
The Reserve Bank of India (RBI) has directed all commercial banks to apply a uniform interest rate on savings account deposits up to ₹1 lakh. This new rule eliminates the interest rate difference among banks for small depositors, resolving customer confusion over which bank offers the best returns.
- Focus on Customer Convenience and Transparency
The biggest beneficiaries of this change are customers who typically maintain a balance of ₹1 lakh or less in their accounts. Since the interest rate is now standardized up to this limit, customers can choose a bank based solely on its quality of service and convenience, rather than being swayed by minor interest rate differences. This move is aimed at increasing transparency and simplifying the banking system for the general public.
- Rule for Higher Deposit Amounts
The standardized interest rate applies strictly to the first ₹1 lakh in a savings account. For any deposit amount exceeding ₹1 lakh, banks retain the authority to set their own, different interest rates, just as they did previously.
- Interest Calculation and Crediting Frequency
The RBI has clarified that the interest must be calculated based on the daily end-of-day balance in the account. Furthermore, banks are mandated to credit the calculated interest into the savings account at least once every three months. This ensures customers receive periodic interest payments and are consistently aware of their earnings.