R. Rakki, a homemaker from Mangalore, now thinks of planning her monthly budget with the interest from her SB (savings bank) account.
Though the interest from the SB account may not help her plan for all requirements of the house, it will definitely help in meeting some requirements such as paying for milk, electricity etc.
This hope comes in the wake of Reserve Bank of India providing an option to banks to pay interest on savings deposits and term deposits at intervals shorter than quarterly intervals.
Rakki’s family plans the requirements for the month and prepares a budget for it. Based on the requirements, they (family members) earmark the money from the salary amount of her husband, who works in a private enterprise in Mangalore.
“The interest from my SB account will help me pay monthly commitments such as milk and electricity bills. The amount we earmark for this from my husband’s salary can be saved for future,” she said.
Their family did not give a thought on this front all these years, as the interest was calculated on quarterly basis. “I cannot pay the electricity bill or pay milk bill on a quarterly basis,” she said.
Senior citizens, who don’t have pension and dependent on fixed deposits for income, will get some relief with this move. Whatever small amount it may be, it will help them tackle some small day-to-day requirements, she said.
However, the 62-year-old Raghavendra Bhat, a former employee from a private sector enterprise in Mangalore, felt that the move would put more liquidity into the accounts of senior citizens.
“As a senior citizen what I think is that it is not good for us, as it will tempt senior citizens to spend,” he said. If the interest is paid once in six months, it will give them a feeling that there is some amount in their account as reserve money, he said.
The members of the Coimbatore-based Vimuktha self-help group feel that this will not help them much. “We are now paid interest every half-year. Since the amount is kept rolling and the balance in savings account is not huge, the payment of interest at shorter intervals may not have much of an impact,” Nagarathinam, leader of Vimuktha Federation in Kanuvai near Coimbatore, said.