The banks are now entitled to fix savings account interest rate although experts say a clear picture of the situation would emerge once bigger banks finalize the rate, as the industrial trend would depend on them. Till now, savings bank accounts fetch 4% interest annually.

Students, working professionals and housewives who had been religiously saving money in their accounts would be the happy ones once revised rates are announced by banks.

"I never got a chance to invest my savings in any policy or get a fixed depositdone. In two extreme situations, one is either skeptical while investing money and keep the money in savings account or else prefer to invest in gold and not let the money die with low interest rates in banks. The new

RBI announcement is certainly a boon," said Manpreet Singh, an engineering student from Chandigarh. "For those who do not invest enough, the increased interest rate would be boon even if the hike is marginal," said Kalyani Singh, who is a lecturer.

Upinder Sawhney, who is a professor in department of economics at Panjab University, said,

"It is a complex situation because one cannot isolate this situation with other banking and investment options. In some indirect manner, the cost would be ultimately passed on to the customer." Even as the RBI has left it to the banks to fix the interest rate for savings account, few of them are already in a "client-pleasing mode."

"Public is watching the announcement with anxiety. How far it can affect the interest rate and how it varies from bank to bank is not very clear yet. It is more of a wait and watch policy," said Rajan Trikha, AGM, State Bank of India.

Source: TOI