Savings accounts remain important as they provide safety, liquidity and easy access to money. Available across public and private banks as well as small finance banks, these accounts are widely used for daily transactions, salary credits and emergency funds.
Most people tend to store their additional funds in these accounts, which offer modest rates compared to other products such as fixed deposits. But the main goal of savings accounts remains to provide liquidity to the users.
Different banks offer different rates in savings accounts. Customers can compare the rates offered by these institutions to ensure that they are able to gain maximum value and that their money is not completely sitting idle.
Also Read | Cash Withdrawals Above Rs 10 Lakh: PAN, Reporting Rules And Tax Implications Explained
Interest Rates By Top Banks:
Most major banks in India currently offer similar savings account interest rates. State Bank of India provides around 2.50% per annum across all account balances. HDFC Bank also offers 2.50% p.a. for savings accounts with a minimum average quarterly balance starting from Rs 2,500.
ICICI Bank gives about 2.5% p.a., with interest calculated daily and credited quarterly in March, June, September and December. Axis Bank offers a similar 2.5% p.a. rate for balances below Rs 2,000 crore.
Bank of Maharashtra, Bank of India and Punjab National Bank, among other public sector lenders, also offer similar rates.
Suryoday Small Finance Bank offers tiered savings interest rates based on daily closing balances. Deposits up to Rs 1 lakh earn 2.50% per annum, while balances above Rs 5 crore up to Rs 25 crore earn a much higher rate of 7.60%. Rates vary for different amounts.
Also Read | The Approach Senior Citizens Should Follow When Considering Small Finance Bank Fixed Deposits
AU Small Finance Bank also offers tiered savings account interest rates based on balance slabs. Deposits less than Rs 1 lakh earn 2.50% per annum, while balances between Rs 5 lakh and less than Rs 10 lakh earn 3.50%. Higher balances from Rs 25 crore to under Rs 100 crore receive 6.75% per annum.
Ujjivan Small Finance Bank offers 2.5% p.a. Interest on up to Rs 3 lakh balance. While deposits above Rs 3 lakh to Rs 5 lakh earn 3.00% per annum. As per the bank's website, higher deposits are rewarded with better interest rates. The bank's highest rates are for balances above Rs 25 crore at 7.15% p.a.
One aspect of savings accounts is that many lenders expect customers to maintain a minimum balance. Failing to do so can lead to penalties. So, while comparing interest rates matters, customers should also look at the minimum balance and other requirements to avoid financial distress.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.