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  • Savings Account

    Let’s demystify some of the confusion that currently surrounds everything financial.

    A bank account is a virtual vault created by the bank on the request of an individual, in which the latter can safely and securely store a virtual representation of his / her real wealth.

    Broadly speaking, there are a few major types of accounts that individuals can maintain with banks:

    • Savings Account.
    • Current Account.
    • Recurring Deposit Account.
    • Fixed Deposit Account.

    These differ in the terms on which you can use them, with regard to deposits, timing, withdrawals, interest rates, purpose, etc. Different banks modify the terms and conditions of these major types of accounts in different ways, in order to create an account that meets the various needs of different customers.

    Banks Providing Best Savings Account Interest Rates in India Updated on 07 Dec 2016

    Savings Account Interest Rates

    Savings Account

    Interest Rate Offered

    Minimum Balance Required

    RBL Bank

    7.1% p.a = Daily balance above Rs.10 lakhs

    6.1% p.a = Daily balance above Rs.1 lakh

    5.1% p.a = Daily balance upto Rs.1 lakh

    Check Here

    Yes Bank

    6% p.a. (On Savings Account balances below Rs.1 crore.)

    Check Here

    Kotak Mahindra Bank

    6% p.a

    Check Here

    Lakshmi Vilas Bank

    5% p.a = Daily Balance Upto Rs.5 lakh

    6% p.a = Above Rs.5 lakh

    Check Here

    IndusInd Bank

    4% p.a = Daily balance upto Rs.1 lakh

    5% p.a = Daily balance above Rs.1 lakh but less than Rs.10 lakhs

    6% p.a = Daily balance above Rs.10 lakhs

    4% p.a = Non-resident NRO and NRE accounts

    Check Here

    Bandhan Bank

    4.25% p.a = Daily balance upto Rs.1 lakh. Interest paid half yearly.

    5% p.a = Daily balance above Rs.1 lakh. Interest paid half yearly.

    Check Here

    HDFC Bank

    4% p.a = Effective from December 1, 2015

    Check Here

    Axis Bank

    4% p.a (applies for all amounts)

    Check Here

    What is a Savings Bank Account?

    In today’s world, hard cash in a gunny sack isn’t the safest or smartest way to manage your finances. Today, we stash our money with banks, who have enabled us to track our balances, transactions, etc. through a variety of means – both in print, and online.

    When an individual approaches a bank with some money and requires the bank to provide a secure place to store that money, the bank will offer the individual its most basic product – a savings bank account.

    Why Open a Savings Account?

    These are some characteristics of savings bank accounts that differentiate them from other types of bank accounts:

    • Most savings bank accounts in India require the account holder to maintain a minimum account balanceof a certain amount, failing which, the bank reserves the right to charge maintenance fees.
    • Savings bank accounts generally offer an interest rateslightly higher than the rate of inflation, in order to keep the real value of money stable throughout the years.
    • Modern savings accounts are feature packed and offer quick links to pay bills, make quick transactions, etc. to the account holder as soon as he / she logs in to the account.
    • Savings accounts have daily withdrawal limitsso that they aren’t used as current accounts.
    • Savings accounts are generally not zero-balance accounts.
    • Savings accounts offer an excellent amount (if not as much as current accounts) of liquidity of funds.
    • Savings accounts are usually opened by salaried individuals, as businesspeople usually prefer to maintaincurrent accounts that offer less interest but more liquidity and generally have no minimum balance requirements.
    • Banks customize savings accounts depending on the general type of usage the account witnesses in its lifetime.

    A savings bank account is a virtual vault that holds your money, allows you to withdraw a certain amount from it at certain intervals, and adds to itself a small amount (as interest) each year.

    Savings banks accounts (or savings accounts) are the most common type of bank account held by individuals around the world.

    There Are a Few Different Types of Savings Accounts Available Today

    Below is a list of some of the categories of savings accounts that are available from most banks:

    Regular Savings Account

    These are opened on the bank’s most basic terms and conditions. These accounts don’t see regular deposits of consistent amounts, nor do they see regular withdrawals. These are primarily the virtual equivalent of a safe where the money just sits waiting to be used by the account holder. These facilitate the most common form of virtual savings that aren’t touched, unless absolutely necessary.

    Salary Based Savings Account

    These most often opened by banks on the request of large companies that require a payment disbursal solution. Banks offer companies preferential rates and specific terms for these accounts – which will be individually handled by each of the latter’s employees. At the date of payment disbursal, the bank withdraws from the company account and disburses the required amount among the salary based savings accounts opened by employees. Generally, accounts that have regular deposits of consistent sums of money are viewed favourably by credit rating agencies. It should be noted that most salary accounts do not have a minimum balance requirement, but once the salary stops being credited (for whatever reason) for 3 consecutive months, these accounts are changed into regular savings accounts with a minimum balance requirement.

    Savings Accounts for Senior Citizens

    These accounts are created for senior citizens, with specific functionality and benefits for those in the senior citizen category. These function in the same way that regular savings accounts do, but generally offer higher rates of interest and exclusive banking privileges. They can be linked to other senior citizen savings schemes to remit the funds from retirement accounts or pension funds to consolidate all the funds under one single bank account – easily manageable by seniors.

    Savings Accounts for Children and Minors

    These accounts don’t generally have a minimum balance requirement and function in the same basic way as regular savings accounts. These are designed to educate the younger generation about modern day banking, facilities, and the general nuances of dealing with a savings account in a bank. These accounts are opened for minors and children by their parents or legal guardians, who supervise their use. This has been a successful step in encouraging the younger generation to save money and giving them a higher sense of responsibility when dealing with money.

    Exclusive Benefits Accounts for Women

    A relatively new offering from many banks, these accounts offer preferential interest rates for specific types of applicants. Female entrepreneurs holding these accounts are also eligible for high value loans at preferential rates, depending on the case and situation. These accounts also have exclusive features and rates that are beneficial to women in particular.

    Zero Balance Savings Account

    This type of account merges the best features of a savings account and a current account. While there are still limits on withdrawal amounts, these accounts are not charged any penalties if the balance in the account falls below the prescribed minimum. Sometimes, in cases where employees shift jobs and have to create new salary accounts – their old salary account will transform into a regular savings account – and when the balance inevitably falls below the minimum, they are charged a penalty or maintenance fee. This does not happen with these accounts. Usually, banks offer these accounts to the economically weaker applicants, but have started offering salary accounts as zero balance accounts due to their utility.

    Eligibility Criteria to Open a Savings Bank Account

    In order to set up and operate a savings bank account from any of the major banks in India, applicants must meet the following eligibility criteria. Please note that this is a list of general requirements and criteria followed by most banks, but your specific bank may ask you for a more authentication or have different parameters:

    1. Savings bank accounts can be opened by resident Indians, non-resident Indians (NRIs), and foreign nationals.
    2. Age: Generally, banks allow only those who are 18+ to open an account on their own. However, savings accounts can be opened for minors by their parents / guardians.
    3. Restrictions: Unlike other banking or financial products, there are almost no restrictions on who can open a savings bank account.

    Documents Required to Open a Savings Bank Account

    Given below is a list of the documents that the customer needs to submit along with his / her application in order to have a savings bank account opened:

    • Proof of age and identity: Any authentic, registered, and recognized document issued by a competent authority, that contains the full name and a recent photograph of the applicant can be used. Customers should keep either a PAN Card, Passport, Driving license, Voter’s ID, etc. on hand.
    • Photographs:Usually, banks require that you submit at least 2 passport sized photographs along with the 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, etc. on hand.
    • Senior Citizen Card:Applicants who wish to open a senior citizen’s account are required to submit proof of their age. A senior citizen card works best for this.
    • Proof of income:Depending on the type of account the applicant wishes to open, he / she may or may not be asked to submit proof of income and employment.

    Depending on the applicant and the type of account being opened, the bank could ask for a few more proofs of identification, age, address, employment, etc. as required.

    How to Open a Savings Account Offline?

    While most bank related work happens online these days, some trips to the bank are absolutely unavoidable. In case you’re stuck without a portal through which to create a bank account online, you can follow these steps to open a savings bank account offline:

    Step 1: Research different banks and their interest rates, find the one that best matches your specific requirements, if any, and the type of bank account you wish to open.

    Step 2: Take a copy of your identity proof, two photographs, address proof, income / employment proof (if necessary), and age proof and head to the nearest branch of the bank in which you wish to create an account.

    Step 3: Once at the bank, tell the clerk you wish to open a savings bank account, and he or she will hand you an account opening form.

    Step 4: Fill out the form as required, and submit the same along with the copies of your identity proof, photographs, address proof, income / employment proof (if required), and age proof to the clerk.

    Step 5: The clerk will then submit the application for processing and, depending on which bank you’ve chosen, your account will be opened and functional in any time between 1 and 12 working days.

    How to Open a Savings Bank Account Online?

    The simplest way to conduct banking operations is online, and opening a savings bank account is a very simple procedure:

    Step 1: Research different banks and their interest rates, find the one that best matches your specific requirements, if any, and the type of bank account you wish to open.

    Step 2: Log on to the website of the bank in which you wish to open your account. Note that not all banks have online account creation facilities.

    Step 3: Fill out the online application form for the savings account that meets your needs and submit it along with a digital copy of identity proof, photographs, address proof, income / employment proof (if required), and age proof. Some banks may require you to submit physical copies of your documents for which they will send over an executive.

    Step 4: Your details will be verified by the bank’s back-end team, and you will be able to start using your account almost instantly.

    How to Open a Savings Bank Account at bankbazaar.com

    A simpler way to do this, without having to undergo the rigorous and confusing step of researching the bank accounts, or having to deal with individual bank websites, is to use the bankbazaar.com application service.

    Step 1: Log on to www.bankbazaar.com and select “Savings Account” from the “Investments” bar.

    Step 2: You will be prompted to enter a few details like your gender, your city of residence, duration of employment, current salary, etc. in order to find a suitable account for a person of your description.

    Step 3:The bankbazaar tool will compute all the information you have provided in order to find you an unbiased list of the best savings bank accounts in your location, and ask if you wish to apply for any of them.

    Step 4: Pick the account you like from different banks, furnish your contact details and personal information, and the bank will contact you to complete the process.

    Out of the three ways to create an account mentioned above, the third is the simplest and most effective, as it ensures that you find the account that is the best fit from across all banksfor which you are eligible.

    Best Savings Accounts in India

    While the interest rate offered is an important factor in deciding which bank you choose, there are other factors like the bank’s approachability, dedication to servicing the customer, the efficiency and security of its mobile app, etc. that one must also consider.

    It’s difficult to say which bank and which product is the best, as every individual customer’s needs are different and specific to them alone.

    Some may just want to park their funds and grow the corpus with a high interest rate (and not care much about the account’s actual usability), while others may want an account through which they can conduct their everyday transactions and will place more stock by usability and customer service than on the interest rate.

    SBI Savings Account

    State Bank of Indiasavings accounts are among the most balanced – as there are SBI bank branches all over the place, and the rate of interest is always competitive. These accounts also have usability through the SBI website.

    ICICI Bank Savings Account

    ICICI Banksavings accounts may not offer the highest interest rate, but are almost unparalleled in terms of ease of use. The intuitive mobile app and online banking facilities with direct bill pay, etc. are excellent tools that can save time.

    HDFC Bank Savings Account

    HDFC Banksavings accounts offer a marginally higher interest rate, but the bank has been known to delay customer queries, and hasn’t received the best customer feedback compared to its rivals. Despite this, HDFC has among the largest ATM networks in cities, which makes it the ideal account for a certain type of account holder.

    In the same way, most savings accounts offered by different banks in India have their own little perks and problems – you just need to find the right one that suits your specific needs.

    How to Check Your Savings Account Balance?

    You can access yoursavings accountthrough a totally secure interface online, or at an ATM, or visit the bank with authentication. Today, most transactions through savings bank accounts are done online. Banks have made it incredibly simple to conduct basic and recurring transactions over the internet through their secure servers – which can be accessed through the respective bank’s smartphone app and websites.

    Using the bank’s smartphone app, account holders can pay bills, check the account balance, transfer funds, and manage their finances in real-time, without the need to visit the bank at all.

    Savings Account in Post Office

    Apart from banks, the Indian Post Office also offers a savings account with the following features:

    • Interest: Interest is offered at the rate of 4% p.a.
    • Opening charges:Rs.20 is charged when opening the account.
    • Minimum balance:
      • For accounts with cheque facility: Rs.500.
      • For accounts without cheque facility: Rs.50.
    • Accounts are transferrable between post offices.
    • Minor accounts can be opened for ages 10 and above.
    • Single accounts and Joint accounts can be created as per the requirement.

    In order to open an Indian Post Office savings account, applicants must approach their nearest post office branch.

    Is the Interest Earned on Saving Account Taxable?

    Interest income of up to Rs.10,000 that arises out of interest on the balance in your savings account is tax free under Section 80TTA. This is applicable for all savings accounts across banks and even Indian Post Office savings bank accounts.

    Savings Account Minimum Balance

    Many banks, depending on the type of savings account, charge a maintenance fee when the balance of funds in the account drops below a certain number.

    For example, Mr. Babu has a savings bank account in Bank A.

    Bank A has a minimum balance requirement of Rs.10,000 at any given time. Mr. Babu conducts transactions with amounts being debited and credited every so often, and incurs no additional charges as his account balance is always above Rs.10,000.

    If his account balance drops to even Rs.9,000, he will start to face “maintenance charges” being levied on his account by Bank A. Let’s say Bank A charges Rs.500 as maintenance, this means that if Mr. Babu cannot raise the balance in his bank account to at least Rs.10,000, the bank will charge him this fee every month.

    So, if Mr. Babu doesn’t raise his account balance and has no transactions in this account – in 18 months, Mr. Babu’s account will show a balance of Rs.0, as Rs.500 is being deducted every month. Rs.500 x 18 months = Rs.9000.

    Banks charge anywhere between Rs.200 to Rs.800 as maintenance for the savings account every month that the minimum balance is below the prescribed amount.

    Savings Account FAQ's

    1. What is the rate of interest offered for general savings account?

      Most of the banks offer 4% per annum for a no-frills savings account and the interest will be credited to your account on a half-yearly basis. However, the interest rate may vary depending on the type of savings account.

    2. When it comes to a savings account, what is nomination? Whom can I nominate?

      Bank accounts have a concept of nomination wherein in case of the unfortunate event of your death, the person appointed by you as nominee will take care of your assets. For singly and jointly held deposit accounts, there can be one nominee. A nominee can be a family member, friend or any trusted person who is above 18 years of age.

    3. How can I access my savings account held with a particular bank?

      Most of the banks offer customers the flexibility to access their savings account through multiple channels like bank branches, web portal, ATMs and through phone, mobile banking if available.

    4. If I enable internet banking facility for accessing my savings account, what advantages do I get?

      With internet banking, you can view your personal savings account from the comfort of your home. Also, you can view monthly statements, enquire balance, transfer funds, update contact information, enquire cheque status and open a recurring or fixed deposit without having to visit the bank branch.

    5. What is the meaning of average monthly balance?

      The AMB or the average monthly balance is the average of closing credit of each day for a calendar month. If a customer does not meet the specified average monthly balance requirements, non-maintenance charges will be levied. Some banks also have average quarterly balance requirements.

    6. What is BSBDA?

      Introduced by the RBI, Basic Savings Bank Deposit Account (BSBDA) requires minimal documentation (KYC Documents only) and has zero minimum balance conditions. Any resident Indian over 18 years of age can open a BSBDA account in a bank of their choice. The customers will be offered services like cash withdrawal, free ATM-cum-debit card and deposits.

    Read Savings Account news or Enjoy it on the go Google Play

    • Procedures for depositing the now-defunct Rs.1000 and Rs.500 notes

      A general view that prevails among public after the recent ban on Rs.1000 and Rs.500 notes is that, bulk amounts stocked at homes will not be accepted by the banks. However, that’s not true yet. If the money is earned through proper channels and is accounted for, then it can be deposited in banks, provided the individual has a valid PAN number. At present, there is no limit set on cash deposits made in the bank where a person maintains an account. However, to deposit an amount that exceeds Rs.50,000, it is necessary that the account holder's KYC procedures are completed.In cases where KYC procedures are incomplete, cash deposits have been limited to Rs.50,000.

      For depositing old currency notes in banks where one does not have an account, it can be done following the standard banking procedures. For this too, the individual has to produce a valid government issued identity proof. The last date to deposit the older currency notes is 30 December, 2016. People who are unable to deposit their cash in bank accounts by last date will be given a chance to do so at some specific offices of RBI. The documents required at the time of making deposits will be notified by these offices. Also, it is to be noted that all deposits of the demonetized currency notes will be taxable.

      16th November 2016

    • Paytm Payment Bank to Open Next Year

      Paytm, a revolutionary company that has taken India by storm, is now set to open its own bank next year. The firm began its venture with simple services of mobile recharge and paying bills, but took on e-commerce, booking bus travel and movie tickets. The company was granted its payment bank licence by the RBI last year. A few other firms that received the license included Vodafone, Airtel and Reliance Industries. Once the paytm bank is open, the customer will have their account linked to their Paytm wallet. An initial deposit of Rs.5,000 will be required to open a savings account. Interest rates on these accounts will be 14.50% p.a. which is the most attractive interest rate to ever be offered. Paytm will also offer a cashback of Rs.60 every 12 months. Customers will be able to rack up Rs.720 cashback in one year. There is a lot more in store for customers such as insurance and systematic investment schemes.

      3rd November 2016

    • Payments Banks Guidelines Finalised, to be Issued soon

      Over a year ago, the RBI granted approval to 11 players to set up payments banks in India. Licensing guidelines for the banks had been rolled out in November 2014. The guidelines provided details of the eligibility of players, requirements and other information for the operation of such banks. Now, the RBI is ready to issue the final operational guidelines for these banks to start functioning. Payments banks will be a completely different type of bank compared to those that already exist in India. These banks will be permitted to provide payments, small savings accounts, and remittances. They can accept deposits of Rs.1 lakh and below. They can offer internet banking and provide debit cards to their customers. These banks will not be allowed to lend. The payments banks will also need to invest 75% in government securities. Since these banks will not operate like the regular banks, a fresh set of guidelines are required. The details of these guidelines will include statutory liquidity requirements and capital adequacy ratio. Approvals were granted in September last year, and banks are expected to function within 18 months from the approval.

      22nd September 2016

    • Profits of YES Bank Loan Products Increases by 33%

      Yes Bank, one of the leading private lenders in the country has seen tremendous growth over the last few years, with its profits rising to 32.8% for the quarter ending June 20, 2016. This is primarily on account of an increase in the loan products offered by the bank. Profits for the quarter stood at Rs. 731.80 crore, with the net interest income touching Rs. 1,316.60 crore, a jump of 24.2%. In addition to this, the margin on net interest also grew to 3.4%, a jump of 10bps over the last year.

      Growth was also seen in the total deposits, which saw an increase of 28.6%, primarily on the back of increased current and saving account openings. Additionally, a growth of 27.5% was witnessed in its total assets. There was some bad news however, with bad loans also seeing an increase. The value of gross non-performing assets went up to Rs. 844 crore from Rs. 368 crore during the quarter, with the net non-performing assets seeing a jump of close to Rs. 200 crore. The Bank could soon enter the asset management space, already having received an in-principle go ahead from SEBI.

      1st August 2016

    • Paytm Prepared to Launch its Payments Bank Soon

      Paytm, the leading digital payment platform, is all set to launch its new payments bank before the festive occasion of Diwali. The budget set for this project is approximately Rs. 350 Crores – Rs. 500 Crores. The services will be launched soon and after its inception, the technological development will take place gradually. This digital payment form is based in Noida. RBI has approved the payments bank license to Paytm. Soon, individuals and small corporates can open savings account with this bank.

      13th July 2016

    • Corporation Bank Adopts New Campaign Strategy for Savings Accounts

      Corporation Bank recently announced the launch of a new campaign aimed to increase the popularity of its Savings Account. Termed “SB Premier League”, it is primarily targeted towards individuals with a high net-worth, government organisations and PSUs. Limited to the port city of Mangaluru, this campaign aims to bring more people into the fold, promoting the product as a premier savings account. The campaign was flagged off by Mr. Jai Kumar Garg, the MD and CEO of Corporation Bank at its MG Road branch. In addition to this campaign, the bank also revealed the launch of two new payroll savings accounts, the Corp Pay Elite and the Corp Pay Delite, which cater exclusively to government and PSU employees respectively.

      12th July 2016

    • Accounts Can be Soon Opened Through Tablets by Kotak Mahindra Bank Customers

      Kotak Mahindra Bank would soon be facilitating the opening of bank accounts through tablets for customers across the country within a period of two to three months. Through this facility customers can open accounts in ten minutes and currently this has been launched in Delhi, Mumbai, Bengaluru and Pune as a pilot. Kotak Mahindra has around 38% of its customers active on digital channels and wants to increase this going forward. The bank has been getting around 80000 new savings accounts opened on a monthly basis. Savings accounts cost was around 5.52% for Kotak Mahindra Bank. WIth the merger of ING Vysya Bank with Kotak Mahindra Bank, there has been a growth of 35% in savings accounts for the year, 2015-2016. This increase came by with the bank’s offering of a higher interest rate at 6%.

      11th July 2016

    • Non-Resident Indians Gain Entry to the National Pension Savings Scheme

      Non-Resident Indians can avail the National Pension Savings scheme by opening an account online. Only those who have a PAN card or Aadhaar Card can avail this opportunity. This new regulation was recently announced by the Finance Ministry. So far, NRIs had been able to open NPS account only by directly applying through banks. Now, NRIs can open a National Pension Savings account online on a non-repatriable or repatriable basis. This scheme offers income security to individuals in their retirement years.

      22nd June 2016

    • SB Premier League Campaign Introduced by Corporation Bank

      In an attempt to encourage savings accounts among customers such as PSUs, government departments and individuals, Corporation Bank launched a new campaign at the Mahatma Gandhi Road branch. The SB Premier League Campaign was inaugurated by the bank’s managing director and chief executive officer, Kumar Garg.

      The managing director request the bank’s staff to aggressively encourage its customers to avail premium SB products. At the inauguration of the marketing campaign, the bank staff members also performed a road show in Mangaluru. The executive director of Corporation Bank, Sunil Mehta was also present at the launch.

      21st June 2016

    • Although Provisions Surge, DBS Bank India has Managed to Make Profit this Year

      DBS Bank Group’s Indian unit stated that they have a net profit in the year 2015-16 of Rs.8.6 crore. Last year, the bank had a net loss of Rs.274.6 crore. The loss was due to a deferred tax credit of Rs.32.7 crore and provisions that fell by 40%. As of 31st March, total provisions decreased from Rs.703.9 crore to Rs.421.6 crore.

      Advances of the bank increased by 11.5%, making it Rs17,653.1 crore. This was mainly due to an increase in disbursals to enterprises (small and medium sized as well).

      13th June 2016


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