In the run-up to the deregulation of SB deposit interest rates, the central bank had directed banks to pay interest on these deposits on a daily product basis with effect from April 1, 2010. Banks currently pay 4 per cent interest on SB deposits.]
Fixed rates create a false sense of security among people and diminish risk appetite while in actuality floating returns are the reality considering inflation and non-optimal assets allocation. Inertia, of course, drives (rather, doesn't) substantial savings justifying the rule that no decision too is a decision, but to be a Sarvarambha Parityagi (G.12.16) in matters finance is likely to fetch higher interest in future.
Since exchange transactions are irrational, the need for price discovery is a crucial role discharged by competition. Freedom, in this sense, though desirable, is not always freely available. Finitude is the ontological constraint here, and this basic reality needs to be understood instead of simply blaming the Keynesians. OWS-wallahs too should fresh up on their Whitehead and Hartmann. [TNM55]
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