How does an increase in savings generally affect interest rates in an economy?

When people save more money, there is usually more money available for banks to lend out. This increase in savings can lead to lower interest rates because banks have more funds to offer borrowers. When the supply of money for loans goes up, banks compete to attract borrowers by lowering the cost of borrowing, which is the interest rate. For example, if many people start saving more and deposit their money in a bank, the bank can lower the interest rates on loans, making it cheaper for someone to buy a car or a house. Overall, higher savings can create a situation where borrowing becomes less expensive for everyone.