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Top 10 Public & Private Sector Banks Promising Higher Interest Rates On Savings Accounts
A savings account is a deposit account that pays interest that is deposited at a bank or other financial institution. Despite the fact that these accounts usually cost a low-interest rate, their stability and serviceability make them an excellent choice for holding capital for short-term purposes. Savings accounts have certain restrictions on how much you can withdraw money, minimum deposit limit, account maintenance charges etc, but they usually allow a lot of manoeuvrability, which makes them suitable for accumulating a nest egg. As a result, we've mentioned higher interest rates on savings accounts hare, which are currently provided by top private and public sector banks.
Public Sector Banks Savings Accounts
IDBI Bank and Punjab National Bank, both public sector banks, currently provide interest rates on savings accounts of up to 3.5 percent, while Bank of Baroda and Canara Bank provide interest rates of up to 3.2 percent. As opposed to what leading private banks have to offer, these interest rates are attractive. HDFC Bank and ICICI Bank, for example, provide 3 percent to 3.5 percent interest, whereas Kotak Mahindra Bank provides 3.5 percent to 4 percent. On the other hand, leading public sector banks such as State Bank of India (SBI) and UCO Bank offer 2.70 percent and 2.50 percent interest on a savings account, respectively. The minimum balance limit in public sector banks' savings accounts starts from Rs 250 if we take the example of UCO Bank. Whereas the minimum balance limit for Axis Bank and HDFC Bank is Rs 2,500 to Rs 10,000. The minimum balance limit for ICICI Bank is between Rs 1,000 and Rs 10,000.
| Sr No. | Banks | ROI per annum in % | Minimum balance limit | W.e.f. |
|---|---|---|---|---|
| 1 | Punjab National Bank | 3 to 3.5 | Rs 500 to Rs 2000 | 1st March 2021 |
| 2 | IDBI Bank | 3 to 3.4 | Rs 500 to Rs 5000 | May 1, 2021 |
| 3 | Canara Bank | 2.9 to 3.20 | Rs 500 to Rs 1000 | 28.09.2020 |
| 4 | Bank of Baroda | 2.75 to 3.20 | Rs 500 to Rs 2000 | 12.02.2021 |
| 5 | Punjab & Sind Bank | 3.1 | Rs 500 to Rs 1000 | 12. 11. 2020. |
| 6 | Indian Overseas Bank | 3.05 | Rs 500 to Rs 1000 | 09.11.2020 |
| 7 | Union Bank | 3 | Rs 250 to Rs 1000 | 31.03.2020 |
| 8 | Central Bank of India | 2.75 to 2.9 | Rs 500 to Rs 2000 | 10.4.2021 |
| 9 | Bank of India | 2.9 | Rs 500 to Rs 1000 | 1.10.2020 |
| 10 | Indian Bank | 2.9 | Rs 500 to Rs 2500 | 21.11.2020 |
| Source: Bank Websites |
Private Sector Banks Savings Account
Among the leading private sector banks here we have listed the top 10 banks which are currently promising higher interest rates on savings accounts.
| Sr No. | Banks | ROI per annum in % | Minimum balance limit | W.e.f. |
|---|---|---|---|---|
| 1 | RBL Bank | 4.75 to 6.50 | Rs 5000 | March 1, 2021 |
| 2 | IndusInd Bank | 4 to 6 | Rs 10,000 | 01.05.2015 |
| 3 | Yes Bank | 4 to 5.5 | Rs 10,000 | 8 December 2020 |
| 4 | Federal Bank | 4 | Rs 5000 | 1 October 2020 |
| 5 | Kotak Mahindra Bank | 3.5 to 4 | Rs 10,000 | 1 April 2016 |
| 6 | HDFC Bank | 3 to 3.5 | Rs 2500 to Rs 10,000 | 11 June 2020 |
| 7 | ICICI Bank | 3 to 3.5 | Rs 2000 to Rs 10,000 | 4th June 2020 |
| 8 | Axis Bank | 3 to 3.5 | Rs 10,000 to Rs 15,000 | 1 April 2021 |
| 9 | South Indian Bank | 2.35 to 4.5 | NIL | 21 October 2020 |
| 10 | J & K Bank | 2.9 | Rs 1000 | 11.7.2020 |
| Source: Bank Websites |
Taxation rule on savings account
Interest on a savings account is taxable to the holder according to the relevant income tax slab rates. That being said, interest earned on a savings account is deductible under section 80TTA. Individuals under the age of 60 are eligible for a limit of Rs 10,000 per year. Those who are 60 years old or older can seek a maximum Rs 50,000 deduction on interest income under section 80TTB. Your savings account interest is applied under the heading income from other sources and then your net income is taxed according to the applicable tax threshold.
