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Which Bank is offering the Highest Interest Rate on Savings Accounts?

Team BankBazaar
·2-min read

Security of savings, high accessibility and liquidity, and some interest appreciation make savings accounts the most common banking tool in our country. These build the foundation to all our financial goals, be it investment plans, savings targets and even while facilitating loans. However, the interest rates of savings accounts are often lower than the prevailing inflation rate, as such it becomes imperative to invest the savings funds in multiple instruments in line with your returns expectations and risk tolerance to earn higher overall returns and meet your wealth-creation goals.

That being said, there are also a few banks that offer above-average returns on their savings accounts. Investors can consider parking a portion of their funds in such savings accounts after a thorough risk assessment. Do note, many savings accounts come with minimum balance requirements that must be met to avoid penalties. Also, interest income from savings accounts are taxed as “income from other sources” according to the applicable slab rate, but tax deduction benefit up to Rs. 10,000 can be claimed on the interest income from savings account under Section 80TTA of the I-T Act. This threshold is higher at Rs. 50,000 for senior citizens under Section 80TTB.

So, if you’re looking to open a savings account, here are some of the banks currently offering the highest interest rates on them on balance up to Rs. 1 lakh.

Highest Savings Account Interest Rates On Balance Up To Rs. 1 Lakh

Bank

Interest Rate

IDFC First Bank

6.00

Fincare Small Finance Bank

5.00

Utkarsh Small Finance Bank

5.00

RBL Bank

4.75

IndusInd Bank

4.00

Yes Bank

4.00

ESAF Small Finance Bank

4.00

Suryoday Small Finance Bank

4.00

Ujjivan Small Finance Bank

4.00

City Union Bank

3.50

Kotak Mahindra Bank

3.50

DBS Bank

3.25

Punjab & Sind Bank

3.10

India Overseas Bank

3.05

Punjab National Bank

3.00

Union Bank of India

3.00

Axis Bank

3.00

Bandhan Bank

3.00

Dhanlaxmi Bank

3.00

HDFC Bank

3.00

ICICI Bank

3.00

Disclaimer: Rates as advertised by respective banks on April 14, 2021, and applicable only on balances under or up to Rs. 1 lakh. Image courtesy: kstudio/Freepik

Data compiled by BankBazaar.com, an online marketplace for loans, credit cards and more.