Apply interest rate hikes to fixed deposits, too

The cost of lending for mortgage holders and business owners has already risen in anticipation of the US Federal Reserve's decision to raise interest rates ("Local interest rates rise ahead of Fed's decision"; Dec 15).

It seems only fair that our banks should increase, in tandem, the interest rates payable to their depositors of savings and fixed-deposit accounts.

In particular, all renewed fixed-deposit accounts should enjoy the higher interest rates automatically instead of paying the higher rates only for "fresh" fund deposits.

The current practice of paying higher fixed-deposit rates only for "fresh" funds is an unnecessary hassle and a very unproductive process for both the banks and depositors, who are "forced" to move their money around the different banks upon maturity to enjoy a higher interest rate.

In all likelihood, the practice may be a zero-sum game as there is only that much money to be switched around to become "fresh" funds for most depositors.

Ng Chee Kheon