Probably the best option to save money and start investing is to have a Savings Account in a bank. It is the type of account that offers many benefits and helps you to build your savings and investment portfolio.
Nowadays, most of the banks in India offer the facility of Savings Account. In fact, there are different types of Savings Account which go on to meet the needs of a diverse customer base.
However, the most important aspect relating to Savings Account is the Interest Rate offered by banks on Savings Account.
With Reserve Bank of India deregulating the interest rates on Savings Account, it is now possible to get the best and the highest interest rates on Savings Account.
Gone are the days when the interest rate offered by banks on Savings Account used to be the same.
So, it is in your interest to know the highest interest rate Savings Account in India.
Here, we go on to show the interest rate offered by various banks in India on Savings Account. We have come up with the details on Best Savings Bank Account in India. We show you the interest rates on Savings Account offered by various banks in India.
It will help you to figure out which are the most suitable banks for opening a Savings Account.
However, before we go on to share the list of best savings bank account in India; it is important to know some of the crucial aspects relating to Savings Account.
So, let’s get going to know Savings Account in detail.
Why do you need to open a Savings Account?
Having a Savings Account with a Bank enables you to keep your money safe. When you keep your money at home, there is a risk of theft or loss. Moreover, keeping your money at home does not fetch you any interest.
Having a savings bank account allows you to transfer or reinvest your money as per your financial objectives. The recent demonetization drive has increased the importance of having a savings account with a bank. It is advisable to put even a small part of your savings in a Savings Bank Account.
Here, we go on to enumerate other important reasons why you should have a Savings Bank Account.
- • A Savings Bank Account allows you to secure your hard earned money.
- With a Savings Bank Account, you get to earn a fixed rate of interest on the deposited amount.
- Savings Account lets you withdraw your money as and when you need it. So, with Savings Account there is liquidity of money.
- It is the simplest means of investing your money. You earn fixed returns on the money deposited in your savings bank account.
- With Savings Account, you get online banking facility by which you can transfer funds whenever required.
- These days’ savings accounts are used for auto payment of bills and other transactions in a hassle free manner.
Some Characteristics of Savings Bank Account
- Most of the savings bank accounts in India require the account holder to maintain a certain minimum account balance. If the minimum account balance is not maintained in your savings account, the bank goes on to charge account maintenance fees.
- Savings accounts offer an interest rate on the deposited amount. This interest rate is slightly higher than the rate of inflation.
- Savings bank account comes with daily withdrawal limits.
- Most savings bank accounts are not zero-balance accounts.
- These days, savings account offer facilities to pay bills and make quick transactions. So, with Savings Account, you can do online banking as well.
- Savings Accounts offer liquidity of funds.
- Savings Accounts are usually maintained by salaried individuals.
So, we see that a savings bank account serves as a virtual vault that holds your money. It enables you to withdraw a certain amount from your fund (in your savings account) at certain intervals. It adds a certain amount of interest to your deposits in your savings account.
Types of Savings Bank Accounts
Here, we go on to categorize the saving accounts that are offered by most of the banks in India.
Regular Savings Account – It is the most common type of savings account offered by banks in India on the basic terms and conditions.
Salary Based Savings Account – It is the type of savings account that is normally opened by companies for their employees. It is used to transfer salary of the employees on a monthly basis.
Savings Account for Senior Citizens – These are like a regular savings account, but with a higher rate of interest and some privileges to senior citizens.
Saving Account for Minors – This type of savings account function like a regular savings account. However, they don‘t have minimum balance requirement. These saving accounts are opened by parents or the legal guardians of the minors and children. It is used to educate children about modern day banking.
Saving Account with exclusive benefits for Women – These saving accounts offer exclusive features and preferential interest rates that are beneficial to women in particular.
Zero Balance Savings Account – This type of account offers the best features of a savings account as well as a current account. Though these accounts have limits on withdrawal amount, they do not levy any penalties on the account holder, if the balance falls below the minimum limit. Usually, these accounts are offered to the economically weaker applicants.
Key Considerations for Selecting Savings Bank Account in India
With respect to Savings Account, the most important decision for you is to select the best bank for opening Savings Account. You need to consider few points before deciding which bank is best for opening Savings Account.
Here, we list out the key considerations which you should keep in mind before deciding the best bank for opening savings account for yourself.
This is the most important criteria that you should look while opening a savings bank account. Typically, you should open a savings account with a bank that offers higher interest rates.
In India, most of the banks provide savings account interest rate at 4% only. However, there are few banks which provide a higher interest rate at around 5-6%.
There are some banks which provide high-interest rates beyond a certain amount of daily balance in your savings account.
For example, if your daily balance is above Rs. 1 Lakh, they might give you 5% interest or even higher as per prevailing bank norms.
The interest accrued is credited in your savings account at the end of every quarter, i.e., on 30th June, 30th September, 31st December, and 31st March.
So, if you are one of those who want to maintain a large balance in your savings account, then you should prefer banks which offer a higher rate of interest on deposits in a savings account. This way you will get good returns.
However, if you maintain a nominal amount in your savings account, then you should check out other factors as well.
Below, we will be listing the interest rates offered by banks on Savings Account in India.
Minimum Balance Requirement
Nowadays, banks in India require you to maintain a minimum balance in your savings account, so that your account remains active. Public sector banks have low minimum balance requirements as compared to Private sector banks.
If the balance in your savings account falls below the minimum limit, the banks go on to charge maintenance fees for the same.
The average monthly balance requirement depends upon the type of savings account you open and also the bank in which you open the account.
Usually, the average monthly requirement can vary from a minimal amount to as high as Rs.1000 or Rs.20000 or even higher depending upon the bank’s rules.
So, if you have no problem in maintaining a particular balance in your savings account, then the minimum balance requirement should not be the prime concern for you.
Nowadays, most of the banks in India offer similar facilities such as debit card, credit card, ATM access, mobile banking, net banking facilities, etc. However, sometimes you require visiting your bank’s branch for some particular reason.
In that case, the physical reach also becomes a prime concern. You may prefer to select a bank which is near your home or office. As far as a number of branches are concerned, State Bank of India has the most physical branches in India. So, you should prefer a bank which offers better facilities and superior customer support to its customers.
This should be one of your prime concerns before selecting a bank for opening a savings account. Generally, private banks are leading as far as customer services, and support is concerned.
However, there might be some exceptions. Sometimes, you do require visiting branch offices. In such cases, helpful staff and good customer support would give you an added advantage.
Banks go on to charge for any extra service offered such as chequebook issue, minimum balance not maintained, Demand Draft charges, transaction fees, and so on. So, you should check all the hidden charges before selecting a bank for opening of savings account.
Location of Branches and ATMs
A bank having more number of branches and ATMs in India is more beneficial to you in case you are a frequent traveler.
So, you should list out your priorities and consider these criteria before opening a savings bank account.
Highest Interest Rate Savings Account
|Bank||Savings Account Interest Rate|
|Yes Bank||6% P.A. on balance < Rs.1 Crore 6.25% above Rs. 1 Crore|
|Kotak Mahindra Bank||6% P.A.|
|IndusInd Bank||Between 4% to 6% Depending on Daily Account Balance|
|RBL Bank||Between 5.5% to 6.75% Depending on Daily Account Balance|
|Bandhan Bank||4% If Daily balance <= Rs.1 lakh|
5% If Daily balance > Rs.1 lakh
|Lakshmi Vilas Bank||Between 4% to 6.5% Depending on Daily Account Balance|
|All other major banks like|
SBI, HDFC, IDBI, PNB, ICICI and Axis Bank
Note: The interest rates on savings account are subject to changes from time to time. So, you should check with the respective bank and their branches before opening a savings bank account for yourself.
So, we see that if you are looking for higher interest rates on your savings bank account, then Yes Bank and Kotak Mahindra Bank are among the front runners offering comparatively higher interest rates than other banks.
Ideally, you should look for a bank with a nearby branch, better interest rate, good customer service, and great net banking facility.
However, you might have other preferences, as well.
It is also advisable that you should not keep large sums of money in your Savings Account as it offers low returns as compared to other long term investment options. You should diversify your funds for exploring higher returns on your invested sum.
That said, Savings Account is still the best option to keep your money safe and to start investing wisely and safely.