Well, look what we have now. A 7% interest rate offering from YES Bank for a Savings account, a raise of 1% from its previous offer.
If we recall, YES was the first bank to offer a 6% interest rate over savings account immediate after RBI has lifted of the regulations. After that few banks’ followed and now it seems YES wants to take it a step further.
Note that 7% will be offered on any amount that is over Rs.1 lakh. For below Rs.1 lakh, only 6% is being offered.
A 7% interest rate is just as good a term deposit for few months, plus we get the unmatched liquidity with a savings account.
But the point here is, unlike term or fixed deposits where the interest rate will be fixed through out the deposit period, there is no guarantee here that this savings rate will remain at 7%. If the bank can raise rate from 6 to 7% today, it can very well reduce it to 5% a month later, just saying.