Anyone keen on the savings environment in both India and the United States may feel like the two are each other’s bizarre-O worlds lately.
While we are experiencing record low savings rates here in the United States, India continues to see their domestic savings rates rise to ridiculous heights.
As of this week, the largest bank in India – The State Bank of India, has seen it’s deposit rates rise to a maximum of 10% APY on deposits with terms of just 7 days to 3 months. And the key rates in India have remained considerably high over the last few years as well – a time in which our rates domestically have encountered extreme lows.
This, however, is not something that is unanimously celebrated in India. In fact, according to this Business Standard article, “The State Bank of India’s decision to increase deposit rates by 25-100 basis points earlier this week has stumped its peers, who were planning to lower these rates after March.” At a time when many Indian banks and lending institutions are pushing for lower loan rates to stimulate domestic economic growth, a rate hike of this kind from the State Bank of India, has left some bank executives a tad disgruntled. One exec went on to state that, “We cannot understand why SBI had to raise deposit rates now. We have no plans to increase our rates but the move has ruled out any scope for a cut in our deposit rates.”
How to Take Advantage of India’s Deposit Rates?
Despite the mixed feelings on high savings rates in India, US savers are likely salivating over their returns. If you’re considering investing in the deposit products of foreign banks and currencies review our coverage of the risks associated with foreign currency CDs.