Moneycontrol
Nov 25, 2011 02:57 PM IST | Source: Moneycontrol.com

Personal finance world is buzzing; check out what matters

There have been many developments in the recent past that are likely to impact our personal finances. It would be prudent to be aware of these and make appropriate changes, if required.


By Sanjay Matai


There have been many developments in the recent past that are likely to impact our personal finances. It would be prudent to be aware of these and make appropriate changes, if required.


1.      Savings Account is no longer a dead investment


Great news! Now we need not earn a measly 4% p.a. (3.5% till about a year back) on the money lying in our Bank Savings Account. Get ready to earn at least 1-2% higher returns. RBI has recently announced that it will no longer dictate the Savings Account interest rate. Henceforth, each bank is free to offer whatever rate it may deem fit.


Some banks have already increased the rate to 5-6%. Given the competition, we can expect other banks to follow soon and a range of 5-7% looks likely. The end result is that our Savings Account will no longer be a dead investment. We can now hope to earn some decent returns.


Though, of course, the rates may come down when the interest rate scenario softens. Secondly, some of the free services offered by the banks may become chargeable as they too need to protect their profitability and continue to offer their best services.


2.      Reduction in the free transactions on 3rd party ATMs


Till recently, you could withdraw money from 3rd party ATMs 5 times in a month (up to Rs.10,000 each time) without any charges. Plus you could also carry out any number of non-financial transactions such as balance enquiry, mini-statements without any charges. This has now changed.

From July 2011 onwards, you can do only 5 free transactions

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