From a 3.5% rate fixed in March 2003, the Savings Account Rate has been revised to 4% by now. Viewed in the context of spiraling inflation, this is not a sufficient increase. currently inflation is above 9% leaving negative returns to the investors.
RBI had asked banks to provide interest on a daily basis with effect from April 1, 2011 on the SB account balances. Previously it used to be on the minimum balance kept between 10th day and last day of the calendar month.
Emergency funds only can be considered for investing in SB account; Alternative modes possible with Money Market Mutual Fund Schemes.
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