(Last Updated On: October 6, 2017)

Through this blog we shall share details on Best Savings Bank Account in India. We have also compiled a list of Interest rates on savings bank account and various important criteria for selection of a savings bank account.

Savings bank account,one of the basic and simplest way to keep your money securely. Each one of you might be having a savings account for sure.If not,some of you might be planning to open a savings account.

Why do you need a Savings Account ?

A simple short answer to this question is : To keep your money safe. Keeping your money at home will not serve any purpose or fetch you any interest. Moreover,after the recent demonetisation drive, it is anyways advisable to put even a small part of your savings in a bank account. You can easily transfer and reinvest the amount deposited in a savings bank account as per your financial objectives.

A detailed answer to the above query is :

  • For security of your hard earned money.
  • For earning a fixed rate of interest on the amount deposited.
  • For liquidity, so that you can withdraw money and use it as and when need arises.
  • It is probably the simplest mode of investing your money and earning fixed returns thereon.
  • These days banks offers online banking facilities where you can easily transfer amounts whenever required.
  • You can give standing instructions for auto payment of bills and auto debits for certain transactions in a hassle free manner.

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Types of Savings Bank Accounts :

  1. Regular Savings Account : A common basic savings account used by an account holder following the basic terms and conditions of the bank.
  2. Salary based Savings Account : These are normally opened by Companies for their employees, where the salary of the employees is transferred on a monthly basis.
  3. Savings Account for Senior Citizens : These are similar to regular savings account, but offer higher rate of interest and certain privileges to senior citizens.
  4. Savings Account with exclusive benefits to women : Few banks offer these type of accounts where exclusive benefits and features are provided to women.
  5. Savings Account for minors : These accounts are opened by parents/guardians on behalf of their children.
  6. Zero balance Saving Account : You are not charged any penalty on such account, if the balance falls below the minimum limit.

Now,coming to the point, the next step is to decide the best bank to open Savings account.You need to consider few important points to decide Which bank is best to open Savings Account ?

Keep in mind all these crucial points before deciding the best bank to open savings account for yourself.

Key Features for selection of Savings Bank Account in India :

1. Interest rate : This is the first and foremost criteria that we normally consider while looking for a savings bank account. We prefer opening a savings bank account with a bank that offers higher interest rates.

Majority of banks provide interest rate on Savings account at 4% only. Few banks may provide a bit higher interest rate at around 5-6%. Some banks also provide high interest rates beyond a certain amount of daily balance in your account. e.g.If your daily balance is above Rs.1 lakh they might offer you 5% interest or even higher as per bank norms.

Important : Recently some of the banks have reduced the saving account interest rate to 3.5% only.

The interest is usually credited in your account at the end of every quarter : 30th June,30th September,31st December and 31st March.

If you are the one who has to maintain a large balance in your savings account, then you should prefer banks offering higher rate of interest, to get good returns.

But,if you wish to maintain a nominal amount in your bank account and diversify the rest of your money, you need to consider other factors as well.

Important : You can avail a tax deduction under section 80TTA on the interest earned on your savings bank account upto a maximum of Rs.10000.

Now,you might be thinking…Which bank offers the highest interest rates ? and Which is the best saving bank account ?

Go through our list of Interest rates on Savings bank account in India as given below.

2. Minimum balance requirement : There is a minimum balance that you need to maintain in your account, so that your account remains active. Private sector banks generally require to maintain a higher amount of minimum balance as compared to Public sector banks.

If your balance falls below the minimum limit, the bank charges maintenance fee for the same.

The average monthly balance requirement can vary from a minimal amount to as high as Rs.10000 or Rs.20000 or even a higher amount as per their rules.This is based on the type of account you open and the bank where you open the account.

So,if you can afford to maintain a particular balance in your account, this should not be your primary concern.

You may also like : 10 Best Credit Cards in India ! 

3. Facilities offered : These days almost all banks offer similar facilities like debit card, credit card, ATM access, net banking facilities,mobile banking etc. However,talking about online facilities, banks like BOI,ICICI,Axis are good.But,as far as physical reach is concerned you might see that SBI has more no. of physical branches.

A bank offering better facilities and prompt customer support is anyways a preferred choice amongst individuals.

4. Customer Service : Generally,private banks have an image of offering better services and customer support. However,there can be few exceptions to it.

Even if banks provide online facilities these days, but there might be cases where you might need to visit the branch offices. In such a situation,good customer support and helpful staff is an added advantage for you.

5. Charges/Fee : Banks usually charge for any extra service offered like cheque book issue, minimum balance not maintained etc. So,you should clarify about any hidden charges beforehand.

6. Location of branches : This is not a major concern.But a bank having substantial number of branches all over India will be more beneficial in case you are a frequent traveller. So,if you relocate from one place to another,this will make life easier for you.A nearby ATM is an added advantage for you.

You should checkout for yourself, what are your priorities and consider these important criteria before opening a saving bank account.

Best Bank to open Savings Account in India :

These are not in any particular order. Your choice may vary based on your requirements,location,purpose,services offered and so on.

  1. State Bank of India or SBI
  2. Kotak Mahindra Bank
  3. Yes Bank
  4. Citibank
  5. Punjab National Bank or PNB
  6. Bank of India
  7. RBL Bank
  8. HDFC Bank
  9. ICICI Bank
  10. Canara Bank
  11. Union Bank
  12. Axis Bank
  13. Bank of Baroda
  14. Lakshmi Vilas Bank
  15. IndusInd Bank
  16. Bandhan Bank

Interest rate on Savings Account in India :

BankSavings Bank Interest Rate
Digibank by DBS7% where balance upto Rs.1 lakh
6% where balance Rs.1 lakh to Rs.10 lakhs
5% where balance over Rs.10 lakhs upto Rs.1 crore
4% where balance over Rs.1 crore
Bandhan Bank4% p.a. where Daily balance <= Rs.1 lakh
6% p.a. where Daily balance > Rs.1 lakh
RBL Bank5.5 % p.a. where Daily balance <= Rs.1 lakh
6 % p.a. where Daily balance > Rs.1 lakh but less than 10 lakhs
6.5% where daily balance > 10 lakhs but less than 50 lakhs
7.1% p.a. where Daily balance > Rs.50 lakhs but less than Rs.5 cr

Yes Bank5% p.a. on balance below Rs.1 lakh
6% on balance of Rs.1 lakh to Rs.1 crore
Kotak Mahindra Bank5% p.a where balance upto Rs.1lakh
6% p.a. where balance is over Rs.1 lakh upto Rs.5 crore
IndusInd Bank4% p.a where Daily balance <= Rs.1 lakh
5% p.a where Daily balance > Rs.1 lakh but less than Rs.10 lakhs
6% p.a where Daily balance > Rs.10 lakhs
4% p.a for Non-resident NRO and NRE accounts

SBI3.5% p.a. on balance upto Rs.1 crore
PNB,HDFC,ICICI,Indian Bank,Dena Bank,Axis Bank,Bank of Baroda3.5% p.a. on balance upto Rs.50 lakhs
4% on balance above Rs.50 lakhs

The above list has been prepared on “as is ” basis, there might be changes in the above interest rates of different banks from time to time. Do check with the respective banks and their branches before opening a saving bank account for yourself.

Important : Recently some of the banks have reduced the saving account interest rate to 3.5% only from the previous 4% interest rate.

Conclusion :

If earning higher interest is what you are looking for, then Yes Bank and Kotak Mahindra Bank offer a better interest rate.This might be a good choice for you.

If you look for location and number of branches, State Bank of India or SBI is a decent choice.It is a Public sector bank and does not have a minimum balance requirement as well.The customer support is also good in various branches.

If you prefer great customer support, HDFC Bank,ICICI Bank get a positive feedback.

Other banks also provide good services, you need to see which one will suit your preferences.

This is a personal opinion, however individual preferences may vary from person to person.

You can also checkout our detailed post on an emerging concept in the banking sector : Payment banks in India

Ideally, a common man should be looking for a nearby branch providing good customer service and great net banking facility as well. However,this may vary as per your individual requirements.

So,firstly make sure, you want to go for a higher interest rate only or you want to have a look at other important deciding factors as well.

Note : Before opening a Bank account, do checkout the interest rate,minimum balance requirement, feasibility, services offered and any charges thereon.

Have you decided which is the best savings bank account based on your needs and priorities ?

Feel free to share your individual experiences with different banks. Your valuable feedback shall be much appreciated and would be of great help to our readers.

This post has affiliate links, I might earn a commission if you purchase.Thanks for supporting my blogging journey !

Keeping a large sum of money in a Savings bank account is not advisable due to the low returns that you get on it. You should anyways look forward to diversify your funds to explore higher returns and invest your money wisely in other long term investments.

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