Top 5 banks in India based on Savings Account Interest Rates

When it comes to Personal Finance, Savings account is the first step. Basic characteristics of a Savings account given below:

  • Safety
  • High liquidity
  • Multiple withdrawal options
  • Quick online transfers through UPI

 ·    Post de-regulation of interest rates on Savings Bank Accounts by Reserve Bank of India (RBI) in 2010, Banks are free to fix the interest rates for their Savings Bank Accounts. Due to this regulatory change the savings bank interest rates vary widely from 2.75% to 7.25%. That’s a wide difference & considering that all Bank offer similar facilities like Net Banking, Mobile Banking, ATM-cum-debit card, UPI etc. it does make sense to park the funds required for one’s monthly expenses in a high interest rate yielding savings account, and earn higher interest. Also, since all the scheduled banks are covered under DICGC (Deposit Insurance & Credit Guarantee Corporation) for an amount of Rs.5 lacs (enhanced from Rs.1 lac to Rs.5 lacs post the Yes Bank fiasco in 2020), there is no worry of ‘safety’ of funds unless & until the Bank comes under the purview of RBI so as to ensure DICGC requirement is complied with by the Bank. It has to be noted that though co-operative banks are covered under DICGC, primary co-operative societies are not covered under DICGC.

Some of the Banks offering high interest rates are given below: 

Bank

Category

Interest Rate
on Savings A/c

AU Small Finance Bank

Small Finance Bank

4.00 – 7.00% p.a.

Bandhan Bank

Private Sector Bank

3.00 – 7.15% p.a.

IDFC First Bank

Private Sector Bank

3.50 – 7.00% p.a.

Jana Small Finance Bank

Small Finance Bank

4.00 – 7.25% p.a.

Utkarsh Small Finance Bank

Small Finance Bank

5.00 – 7.25% p.a.

There is a lot to benefit by choosing a Savings Account with high interest rates. As can be seen, the interest rates for the above 5 banks have a wide range, which varies based on the account balance being maintained. Depending upon the balance we intend to maintain in the Savings Account, appropriate one from the above 5 Banks can be chosen based on the interest rate for that balance.


Happy saving !!

 

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