Nowadays, the Reserve Bank has given all banks complete freedom to set the rules and interest rates for various deposits and fixed deposits. Therefore, depositors should carefully study the interest rates and terms offered by different banks before making an investment decision. Although the Reserve Bank has granted all banks freedom, it has also laid down some basic frameworks!
Today, savers have access to a variety of deposit schemes beyond traditional bank deposits. However, the most popular option remains the fixed deposit at banks! In reality, bank depositors act as the bank’s “lenders.” The depositors essentially lend money to the bank. But the bank does not provide any collateral or guarantee for these deposits. In other words, the loans provided by depositors are unsecured. If the bank fails, depositors also stand to incur losses. Depositors are attracted to banks because bank branches are conveniently located. But more importantly, it is the immense trust that the general public places in banks!...(To continue, open the magazine)