When the interest rate goes up, the price of the current consumption will also go up. A higher opportunity cost of current consumption due to the increase in interest rate generates a substitution effect that causes a decline in purchase of products in the current period. Therefore, saving will increase as a result of the substitution effect. However, a consumer will receive more income on his saving, if the interest rate increases. Because consumption is a normal good in the current period, it is expected that a raise in income could lead to an increase in current consumption and a reduction in saving.So saving reduces as a result of income effect of a higher interest rate. As a result, the total effect of an increase in interest rates on saving is ambiguous.