Best Saving Bank Account in India: Interest rates and features
Our today’s post is about the best saving bank account in India. We have also compiled a list of interest rate on savings account and criteria for selecting the best saving account.
Saving accounts are ideal for depositors who are seeking to save while earning a modest amount of interest.
A few key advantages of a saving account our ability to withdraw anytime as per the need unlike the other long term deposit such as a certificate of deposit.
Stay tuned with us to learn best banks in India for savings account choices for Indian citizens in 2019.
So, let’s get started
What is a Saving Account?
It is an interest-bearing deposit account held at a bank or other financial institution that proffer a modest interest rate.
There are financial institutions that offer the saving account may limit the number of withdrawals from account each month.
Best Savings Bank Account in India: Features
1 Interest rate-This is the first and foremost criteria that one considers before opening a saving account. Always go for the bank which provides you the higher interest rate.
Majority of the banks provide interest rates on saving bank account at 4% only. There a few banks which provide you a higher interest rate
The interest is usually credited at the end of every quarter: 30th June, 30th September, 31st December, and 31st March.
- Minimum balance Requirement-There is a minimum balance that you are required to maintain in your account so that your account remains active.
Private sector banks generally required to maintain a higher amount of minimum balance as compared to the public sector banks.
There is a maintenance charge if your balances fall the below minimum limit.
The average monthly balance requirement can vary from a minimal amount to as high as Rs.10000 or Rs.20000 or even a higher amount as per their rules.
This is based on the type of account you open and the bank where you open the account.
3 Facilities offered-
These days bank offer similar facilities such as debit card, credit card, ATM access, net banking facilities, mobile banking facilities, etc.
4 Customer services
The generally private bank has an image of offering better services and customer support.
Nowadays the bank also provides online support also but there might be the cases when you have to visit the branches.
Why do you need a saving account?
You need to open a saving account to keep your money safe. Keeping your money at some won’t serve any purpose or fetch you any interest.
One can easily transfer and reinvest the amount deposited in a savings bank account as per your financial goals.
A detailed answer to the above query is
- For the security of your hard earned money.
- To earn a fixed rate of interest on the amount deposited just like a fixed deposit.
- For liquidity, so that you can withdraw the money and use it as when the need arises
- It is probably the simplest mode of investing your money and earning fixed interest thereon
- You can give standing instruction for auto payment of bills and auto debits for certain transaction in a hassle-free manner.
Types of Saving bank accounts
- Regular Saving Bank Account- It is a common basic saving account which is used by the account holder following the basic terms and conditions of the bank
- Salary based saving account- This account is opened by the companies for the salaries of their employees.
- Saving accounts for senior citizens- It is similar to the regular saving account, but offer a higher rate of interest and certain privileges to the citizens.
- Saving accounts with exclusive benefits to women–Few banks offer these type of accounts where exclusive benefits and features are provided to a woman.
- Saving accounts for minors- These accounts are open by the parent or guardian on behalf of their children.
- Zero balance saving account-You are not charged any penalty on such account if the balance falls below the minimum limit.
- Best Investment options in India
Best Bank to open Savings Account in India
Best Savings Account 2019
|Best Savings Bank Accounts||Debit Card||Product Features||Offers & Discounts|
|Axis ASAP Instant Savings Account||Virtual Visa Debit Card
Daily Withdrawal Limit Rs 1 lakh
Online Rewards Debit Card
Daily Withdrawal Limit Rs. 50,000
Purchase limit Rs. 1 lakh
|Zero Balance Savings Account
Auto Sweep in Feature i.e. Balances above Rs. 10000 automatically become an FD
|Rs. 150 discount on BookMyshow
Rs 1,000 cashback on Cleartrip App
Airtel Wynk 2 Months Free subscription
|Kotak Mahindra Bank 811||811 Virtual Debit Card / Classic Debit Card||Zero Balance Savings Account
Earn up to 6%* interest annually on your account balance
|Get exclusive offers and discounts on Jabong, BigBasket, PVR, Swiggy, Goibibo and much more|
|digiBank by DBS||Complimentary VISA Debit Card
Unlimited free withdrawals
|Zero Balance Savings Account
Earn 7% p.a. interest on account balance above Rs. 1 lakh and up to Rs 2 lakhs
|Cashback of up to 10% on shopping from a wide range of online merchants|
|Standard Chartered Bank Digital Account||International Platinum Debit Card
Free for the first year
|Earn 2x reward points on every online transaction
Earn 3.5% interest p.a.
|Complimentary 3 months Saavn Pro Subscription
15% discount on 600+ restaurants
|SBI Insta Savings Account||Rupay Debit Card||Paperless account opening (OTP based e-KYC)
Free Rupay debit card
|With SBI Rewardz get exclusive offers & discounts on shopping, travel and much more|
|ICICI Bank Regular Savings Account||Smart Shopper Silver Debit card
Cash withdrawal limit of Rs. 50,000
Daily Purchase Limit of Rs. 1,00,000
|Free Internet and Mobile Banking
Money Multiplier Facility (Auto Sweep Facility)
|Amazon voucher up to Rs 1,200 off for household needs from the 1st to the 3rd of every month
Get 10% instant discount on shopping at Myntra
These are not in any particular order. Your choice may be varied based on your requirements, locations, purpose, services offered and so on
- State Bank of India or SBI
- Axis Bank
- Kotak Mahindra Bank
- Yes Bank
- Punjab National Bank or PNB
- Bank of India
- RBL Bank
- HDFC Bank
- ICICI Bank
- Canara Bank
- Union Bank
- Bank of Baroda
- Lakshmi Vilas Bank
- IndusInd Bank
- Bandhan Bank
Best Private Bank in India for Savings account
- HDFC Bank
- Axis Bank
- Kotak Mahindra Bank
- Yes Bank
- RBL Bank
- ICICI Bank
- Bandhan Bank
Savings Account Interest Rates
|Savings Account Interest Rates|
|Savings Account||Interest Rate Offered|
|Kotak Mahindra Bank||
|Lakshmi Vilas Bank||
|Axis Bank Interest Rates||
High-Interest Savings Account in India
We will now put light on the interest rate on the saving accounts in India
The interest rate on the saving bank account in India
|Bank||Savings Bank Interest Rate|
|Digibank by DBS||6% p.a. where balance is upto Rs.1 lakh
7% p.a. on the incremental amount where balance is Rs.1 lakh to Rs.2 lakhs
5% p.a. where balance is between Rs.2 lakhs to Rs.5 lakhs
4% p.a. on the incremental amount where balance is above Rs.5 lakhs
|Bandhan Bank||4.25% p.a. where Daily balance <= Rs.1 lakh
6% p.a. where Daily balance > Rs.1 lakh
|RBL Bank||5.5 % p.a. where Daily balance <= Rs.1 lakh
6 % p.a. where Daily balance > Rs.1 lakh but less than 10 lakhs
6.5% p.a. where daily balance > 10 lakhs but less than 50 lakhs
|Yes Bank||5% p.a. on balance below Rs.1 lakh
6% p.a. on balance of Rs.1 lakh to Rs.1 crore
|Kotak Mahindra Bank||5% p.a where balance upto Rs.1 lakh
6% p.a. where balance is over Rs.1 lakh upto Rs.1 crore
5.5% p.a. where balance is Rs.1 crore and Rs.5 crore
|IndusInd Bank||4% p.a where Daily balance <= Rs.1 lakh
5% p.a where Daily balance > Rs.1 lakh but less than Rs.10 lakhs
6% p.a where Daily balance > Rs.10 lakhs
4% p.a for Non-resident NRO and NRE accounts
|SBI||3.5% p.a. on balance upto Rs.1 crore|
|PNB, HDFC, ICICI, Indian Bank, Dena Bank, Axis Bank, Bank of Baroda||3.5% p.a. on balance upto Rs.50 lakhs
4% on balance above Rs.50 lakhs
The above list has been prepared on “as is” basis, there might be changes in the above interest rates of different banks from time to time.
Do check with the respective banks and their branches before opening a saving bank account for yourself.
Important: Recently some of the banks have reduced the saving account interest rate to 3.5% only from the previous 4% interest rate.
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Which saving account is best: Final Take
If earning profitable interest is your criterion then I would say, Yes bank and the Kotak Mahindra bank will provide a better interest rate.
This is indeed a great choice for you.
If location and number of branches is your requirement then I must say “state bank of India “or SBI is a decent choice.
SBI is a public sector bank and does not have minimum balance requirements as well.
The customer support is also excellent in the various branches.
The reviews of the Kotak Bank are quite impressive when it comes to availing quick services and great client support.
There are other banks which offer great services it depends on you which you find the most reliable.
It is to be noted individual preference may vary from person to person.
Ideally, common investors always look upon a nearby brand for the convenience and great net banking facility as well.
Note: Before opening a bank account, it is significant to check upon the interest rate, minimum balance requirement, feasibility and variety of services offered and any charges thereon.
Let us answer a few FAQs regarding this
Which bank gives the highest interest rate on the saving account?
Kotak Mahindra Bank – Earn up to 6% p.a. interest on savings account balance over Rs. 1 lakh and up to Rs. 5 crs. Earn 5% p.a. interest on a savings accounts balances up to Rs. 1 lakh and 5.5% p.a. interest on savings accounts balances above Rs. 5 crs. Applicable for Resident Accounts only.
At Yes bank you will get 6%
How to open a Saving Account?
In order to set up a saving account, visit your bank or set up an account online through a bank’s website.
You can make the deposit at the teller window, set up automatic transfers from your checking account or have a portion of your paycheck automatically deposited into your savings account.
To withdraw funds you can visit the local branch make a transfer to another account over the internet or you can use an automated teller machine.
What are the drawbacks of saving account?
Every coin has two sides. Similarly, it has its advantages and disadvantages too
- Saving accounts usually pay a lower interest rate
- Its ready availability of funds could tempt you to spend them
How much money should you have in a Savings Account?
As a general rule, financial advisors recommend you have enough savings to cover at least three to six months’ worth of bills.
This gives you a financial cushion in an event of you loses your job, face a medical issue, or encounter another money-draining emergency. Because of the liquidity of a savings account, you can access the money quickly and easily when you need it.
Why open a Saving Bank Account?
Saving account as the name says, is a great way to save funds for the future. Excess funds can be kept aside and used when necessary
Below stated are a few reasons why you should open a saving account?
- It is beneficial to keep your unneeded funds in a saving account
- Saving account offers an interest that is slightly higher than the rate of inflation, in order to keep the real value stable throughout the year
- Holding saving account will improve financial stability since the funds in the account have a limit on the number of withdrawals.
Savings Bank Account Eligibility
The following are the eligibility criteria for opening a savings bank account:
Q What are the documents required to open a saving account?
When customers decide to open a savings account, the bank requires the customer to submit certain documents. They are as follows:
- Proof of age and identity: Any authentic, registered, and a recognized document issued by a competent authority, that contains the full name and a recent photograph of the applicant can be used.PAN, Voter ID, Passport, and Driving license are some examples of the documents that are accepted by banks when applying for a savings account.
- Photographs: Most banks require that customers submit at least 2 passport-sized photographs along with their application.
- Proof of address: Any authentic, registered, and recognized issued by a competent authority, which contains the address of the applicant can be used. Customers should keep either a Driving license, Voter’s ID, Passport, Utility bill is among some of the documents that can be submitted to the bank.
- Senior Citizen Card: Almost all banks offer Senior Citizen savings accounts to their customers. Applicants who wish to open a senior citizen’s account are required to submit proof of their age. A senior citizen card is issued by the Social Welfare Department and is the document that is most preferred as proof.
How to check the balance of savings account?
One can access their saving account with a totally secured interface, or at an ATM, or visit the bank with authentication. Today most transaction of saving account are performed online.
Nowadays, the bank has made it incredibly simple to conduct the basic and recurring transaction over the internet through their secure servers.
Using the bank’s smartphone app, account holders can pay the bill, verify the account balance, transfer funds, manage their finances in real time without the need to visit the bank at all.
Savings Account Vs. Current Account Vs. Fixed Deposit Vs. Recurring Deposit
|Savings Account||Current Account||Recurring Deposit||Fixed Deposit|
|Purpose||Surplus funds are deposited in the account for the purpose of saving.||Deposits and withdrawals are made based on the business transactions carried out by the account holder.||Monthly fixed installments are deposited towards the account.||Lump sum amount is deposited on opening the account.|
|Tenure||No set tenure||No set tenure||Deposits need to be made for a minimum of 6 months to a maximum of 10 years.||Deposits can be opened for a minimum of 7 days to a maximum of 10 years.|
|Interest rates||3% to 7% p.a.||Not applicable||5.50% to 8% p.a.||5.75% to 8.25% p.a.|
|Withdrawal limits||Limited to 5-7 per month||Unlimited daily withdrawals||Not applicable||Not applicable|
|Tax benefits||Deductions can be claimed under Section 80TT interest earned up to Rs.10,000.||Not applicable||TDS||Up to Rs.1.5 lakh can be claimed in tax deductions under section 80C of the Income Tax Act.|
|Loans||Loans can be availed against a savings account||Loans can be availed by select customers and it is referred to as ‘overdraft facility’||Loans can be availed against a recurring deposit.||Loans can be availed against a fixed deposit.|
Savings Account Interest Calculator
The interest rate on the saving bank account is computed on a daily basis. The following formula is used to calculate the interest that an account earns
interest rate = Daily closing balance x Rate of interest x (No. of days/365)
The following example will help illustrate the formula in use:
Mr. X has an opening balance of Rs.1 lakh at the beginning of the month. He makes a withdrawal of Rs.30,000 on the 9th day of the month. He deposits Rs.10,000 on the 20th day of the month.
Assuming the monthly interest rate offered by the bank is 1%, the interest rate for that month will be calculated as follows:
Interest earned from day 1 to day 9: Rs.1,00,000 x 1/100 x 9/365 = 24.65
Interest earned from day 10 to day 19: Rs.70,000 x 1/100 x 10/365 = 19.17
Interest earned from day 20 to day 30: Rs.80,000 x 1/100 x 11/365 = 24.10
Interest earned for the month =24.65 +19.17 +24.10 = Rs.67.92
Savings Bank Account FAQ
Let us answer a few FAQs in regards to the saving account
Q. Can the saving account be held jointly?
Yes, a saving account can be held jointly by two or more individuals.
q When is the interest earned on a saving bank account credited?
Interest earned from the balance of savings account is usually credited at the end of every quarter.
Q How can the money be deposited into a bank account?
Money can be deposited into the saving bank account using the cash, cheque, demand drafts. They can be directly deposited at the bank using a deposit slip or ATM drop boxes.
Q When does saving bank account become dormant?
If the account holder failed to maintain the saving account for a period of two years, the account is considered as dormant.
Q Do saving account have the tax benefit?
Interest earned on a savings bank account is eligible for deduction up to 10,000 under the section 80TTA. Any interest earned above this amount is taxable.
Q Can a person holds more than one saving account?
Yes, there is no restriction on the number of savings account that a single person can manage
Q Can we change the nominee to the saving account?
Yes, nominee to the saving account can be changed as per the discretion of saving account holder. A form can be either be obtained from the bank branch or downloaded online, should be filled and submitted at the bank branch.
Q How many withdrawals are permitted from a saving account each month?
Most banks allow the account holder to make a 6 to 7 withdrawal per month. However, these rules are mostly applicable to ATM withdrawal
Q How to reactivate the dormant saving account?
a dormant saving account can be reactivated via contacting the bank branch, submitting a return request for the reactivation, or carrying out the deposit transaction against the account.
I hope you had a great time reading about “which bank is best in India for saving account”
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Your feedback and suggestion are highly appreciated for this post.
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It is advisable not to park a large amount of money in the saving bank account due to the low returns you get on it.
You should always look forward to diversifying your funds to explore higher interest and invest money.
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