In an effort to give the U.S. economy a solid shot in the arm, perhaps business writers should ask Washington lawmakers and the White House on their thoughts of implementing a plan along the lines India promptly put into effect to spur savings and investment, suggests Grumpy Editor.
India authorities acted with speed.
Note the time span:
On Friday, Reserve Bank of India Governor Duvvuri Subbarao said that country’s banks need to increase deposit rates and reduce lending rates to help the economy.
Then yesterday, State Bank of India, Bank of India and other financial institutions raised their deposit rates by up to 150 basis points across various maturities ensuring higher returns for depositors.
Subbarao just before the weekend said, “To achieve our collective aspiration…we need to raise the level of national savings and channel those savings into investment.”
The decision of State Bank of India and Bank of India to raise fixed deposit rates will prompt other lenders to hike their rates to compete for savers' money, reports The Hindu, a New Delhi daily newspaper with a circulation of 14.7 million copies.
Higher interest rates on savings in the U.S. would provide account holders with more income. Thus, more funds would inspire more purchases, boosting the economy and creating jobs.
Current annual percentage yield (APY) for a one-year certificate of deposit in the U.S., according to Bankrate.com, is 0.51 percent --- that’s a shade over half of 1 percent --- and doesn’t add much to U.S. wallets.
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