Banks Vs Post Office: Interest Rates On Savings Account Compared
Opening a savings account is the first step toward your personal finance when it comes to short-term savings with adequate liquidity. Savings accounts are a safe location to park your surplus savings and offer a simple way to withdraw them, making them a must-have tool for meeting the liquidity requirements of your deposit. The Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the Reserve Bank of India, provides a coverage of Rs 5 lakh per depositor on his or her saving account. These accounts also pay secure interest rates on a quarterly basis which can be an ideal way to meet your short-term goals or emergencies. Interest rates on savings accounts differ from bank to bank, therefore we'll compare the rates of the top five public, private, and small finance banks offered on post office savings accounts.
Top 5 Public Sector Banks Offering Highest Interest Rates On Savings Account
Here are the top 5 public sector banks that are now giving the highest interest rates on savings accounts, according to our research.
Banks | Interest Rates Per Annum | W.e.f. |
---|---|---|
UCO Bank | 3.50% to 4.00% | 25.08.2017 |
Punjab & Sind Bank | 3.00% to 3.20% | 01st February 2022 |
Canara Bank | 2.90% to 3.20% | 28.09.2020 |
Punjab National Bank | 2.75% to 3.25% | 3rd February 2022 |
Bank of Baroda | 2.75% to 3.20% | 19/07/2021 |
Source: Bank Websites |
Top 5 Private Sector Banks Offering Highest Interest Rates On Savings Account
According to our analysis, here are the top 5 private sector banks that are currently offering the highest interest rates on savings accounts.
Banks | Interest Rates Per Annum | W.e.f. |
---|---|---|
RBL Bank | 4.25% to 6.25% | February 03, 2022 |
IDFC First Bank | 4.00% to 5.00% | 01/05/2021 |
IndusInd Bank | 4.00% to 5.00% | July 23rd, 2021 |
Kotak Mahindra Bank | 3.50% | Sep 20, 2021 |
Bandhan Bank | 3.00% to 6.00% | November 1, 2021 |
Source: Bank Websites |
Top 5 Small Finance Banks Offering Highest Interest Rates On Savings Account
According to our analysis, here are the top 5 small finance banks that are now offering the highest savings account interest rates.
Banks | Interest Rates Per Annum | W.e.f. |
---|---|---|
Ujjivan Small Finance Bank | 4.00% to 7.00% | 6th March 2021 |
ESAF Small Finance Bank | 4.00% to 6.50% | 01st August 2020 |
North East Small Finance Bank | 4.00% to 6.00% | 27th Jan 2022 |
Suryoday Small Finance Bank | 4.00% to 6.25% | January 20, 2022 |
Utkarsh Small Finance Bank | 3.75% to 7.00% | October 1, 2021 |
Source: Bank Websites |
Post Office Savings Account
The Post Office Savings Account (POSA) is offered by the Department of Posts and requires a minimum deposit of Rs 500 to establish. By individually, jointly, or on behalf of a minor, an account can be established. Currently, POSA provides a 4% annual interest rate, which is computed on the basis of a minimum balance. Interest generated on all savings bank accounts up to Rs. 10,000 in a financial year is exempted from taxable income under section 80TTA of the Income Tax Act.
If no deposits or withdrawals are made in an account for three years in a row, the account is considered silent/dormant. The account allows a minimum withdrawal of Rs 50, after which no withdrawals would be authorized, lowering the minimum balance to Rs 500. If the account balance does not exceed Rs. 500 before the end of the financial year, a fee of Rs. 100 will be deducted as an account maintenance fee, and if the account balance falls to zero, the account will be closed permanently.