The first step in a financial journey for any individual begins with opening a savings bank account. The main intention of having a savings bank account is to park the money in a safe place. Almost all the banks and financial institutions in India have savings bank which assures the depositors with a nominal interest on their deposited money.
Having a savings bank comes in handy to conduct any type of financial transaction be it controlling a person's cash management or for payment of utility bills, insurance premium amount payment, payment towards RD, loan EMIs, paying credit card bills and the list goes on.
What is a Savings Account?
A Savings Account is a kind of interest-bearing deposit account which can be opened at any of the banks or financial institutions. Though it pays only meagre interest rates on the deposited amount, it is considered as a safest and reliable place to park one's funds. A savings account provides liquidity and hence acts as the best source to invest money for short term needs.
Despite having some limitations on withdrawal of funds, savings account offer best flexibility which is ideal for developing an emergency fund or a place to keep your surplus cash which is not required at the moment or for fulfilling a short term goal so it will generate some interest amount rather than keeping the money at home which will not fetch any interest. The interest rate on a savings account is comparatively less over other types of savings schemes in India.
Interest rates on the savings account are subject to change and it will be decided at the sole discretion of the respective bank and truly based on supply and demand of savings accounts and government's influence on interest rates.
Please Note: It is mandatory to meet the minimum balance requirement in all the savings account, failing to do so will attract fee or fine.
Key Takeaways from Savings Account
- Enjoy liquidity and ease of doing transactions with savings accounts.
- As savings accounts earn interest apart from keeping your money safe, it is a good option to park your funds if you are looking for short term investment or for building an emergency corpus.
- No limit on withdrawal limit.
- Earn interest on the savings account.
- Interest amount arising from a savings account is considered as a taxable income as per the Income Tax Act 1961.
- Nullifies risk factor.
- Get ATM, net banking and mobile banking facilities with a savings account.
Let's know the list of 5 Best Savings Account With Best Interest Rates in India.
1. IDFC First Bank Savings Account
Formerly known as IDFC Bank, the IDFC First Bank Savings account offers the best interest rate of up to 7% per annum. IDFC First Bank is an integrated infrastructure finance company whose headquarters is located in Mumbai. It started its banking operations on October 1, 2015, after receiving a universal banking license from the Reserve Bank of India (RBI) in July 2015.
Apart from providing the best interest rates on the savings account, it also provides an array of benefits to its customers.
Features of IDFC First Bank Savings Account
- A minimum balance of Rs 25,000 has to be maintained in a savings account at all the branches which are located in metro cities.
- Earn 6.00% rate of interest per annum if the balance in the savings account is less than or equal to Rs 1,00,000.
- Earn a 7.00% rate of interest per annum, if the balance amount in a savings account is more than Rs 1 lakh but equal to or more than Rs 1 crore.
- Get Rs 25 lakh personal accident coverage.
- Get free airport lounge access.
- Get a free VISA Signature Debit Card.
- Earn Rs 250 cashback on BookMyShow monthly
2. RBL Bank Savings Account
Formerly known as Ratnakar Bank, the RBL Bank is one of the emerging private sector banks in India with its headquarters located in Mumbai. Founded in 1943, the bank offers across six verticals namely - branch and business banking, corporate and institutional banking, commercial banking, retail assets, treasury and financial market operations, development banking and financial inclusion.
Features of RBL Bank Savings Account
- Get interest rate at 6.75% per annum on balances higher than Rs 3 crore and up to Rs 5 crore.
- Get 6.75% interest per annum on balances more than Rs 10 lakhs and up to Rs 3 crore
- Get an interest rate of 6.00% per annum on balances which are more than Rs 1,00,000 and up to Rs 10 lakhs.
- Earn an interest rate of 5.00% per annum on balances up to Rs 1,00,000 (based on daily balances)
- Also, get offers on debit cards
- Get wealth management solutions based on your financial goals and requirements.
3. YES Bank
The YES Bank is known as one of the leading Indian private sector bank, founded in 2004 by Rana Kapoor and Late Ashok Kapur. The bank mainly operates as a corporate bank with asset management and retail banking as its ancillary role.
The bank provides several types of savings account to its customer base at an attractive interest rate of 6% - 6.5% per annum for above Rs 1 lakh of the deposited amount.
Features of YES Bank Savings Account
- Get different debit cards based on the type of savings account.
- Get maximum tax exemption benefit.
- Earn an interest rate of 5% per annum for balances of up to Rs 1 lakh in a savings account.
- Earn 6% interest per annum for a savings account balances of Rs 1,00,000 up to Rs 1 crore.
- Get 6.25% per annum interest rate for balances of Rs 1 crore up to Rs 100 crore.
- Get personal accident insurance coverage.
- Avail pricing option benefit which is an alternative to maintaining a minimum balance.
4. Kotak Mahindra Bank
Kotak Mahindra Finance Limited (KMFL), the group's flagship country received a banking license from RBI on February 2003 and thus became the first non - banking finance company to get converted into a bank. The Kotak Mahindra Bank merged with ING Vysya Bank on April 1, 2015, and expanded its presence with more footsteps across India.
Features of Kotak Mahindra Bank Savings Account
- Kotak Mahindra Bank's 811 Digital Bank account offers an attractive interest rate of 6% per annum.
- It is a zero balance account which does not charge its users on non - maintenance of balance in the account.
- Earn 6% per annum interest on savings balance with balances over Rs 1,00,000 and up to Rs 10,00,000.
- Earn 4% interest rate per annum on savings account wherein balance amount is up to Rs 1 lakh.
- Get 5.5% per annum on interest on savings account balance above Rs 10,00,000.
5. Bandhan Bank
In 2001, Bandhan started as a not for profit enterprise providing microloans to the underprivileged section of the society. In April 2014, the Bandhan Group received conditional approval from the country's central bank - RBI to set up a universal bank and the bank commenced its operations beginning from August 2015.
Features of Bandhan Bank Savings Account
- Get a 7.00% interest per annum, if the daily balance amount is above Rs 50 crore.
- Earn a 6.55% interest rate per annum if the daily balance is above Rs 10 crore and up to Rs 50 crore.
- Earn 6.00% per annum of interest rate on the savings account, if the deposited amount is in the range of above Rs 1,00,000 - Rs 10 crore.
- Earn 4.00% per annum interest rate on savings account if the daily balance is up to Rs 1,00,000.
- Monthly average balance requirement is Rs 5,000 for Standard Savings Account of Bandhan Bank.
- Get free cash deposit limit of Rs 5 lakh per month under Standard Savings Account.
About the Author
Archana has been covering investment planning and personal finance for more than two years.