The RATE RACE begins: Yes Bank Increases Savings rate to 6%

After RBI deregulated interest rates on Saving Account Deposits yesterday (25TH Oct 2011) Yes Bank grabbed the opportunity to ignite a rate war by offering 6% interest in an effort to wean away accounts from established players with very high number of savings account, such as SBI, HDFC Bank.

HDFC Bank and SBI has very high CASA deposits of close to 50% of total deposits and has built vast troves of cheap cash in savings account. 

InvestorZclub strongly recommends avoid on the stocks of HDFC Bank, SBI, ICICI Bank, AXIS Bank and PNB for next few months until some clarity emerges on how this deregulation is affecting the cost of funds for these banks.