In particular, savings bank accounts bear lower interest rates than those on FDs of banks or NBFCs. Compared to many private and small finance banks there are some Public sector banks that provide savings accounts at significantly cheaper interest rates. A savings account can also be used for parking the emergency funds and hence it is always important to check the interest rates before opting a savings account. Public sector banks, such as IDBI Bank and Canara Bank, presently offer interest rates on savings accounts of up to 3.5% respectively. In contrast with what leading private banks bid, these interest rates are attractive.
HDFC Bank and ICICI Bank, for example, provide 3 to 3.5 per cent interest, and Kotak Mahindra Bank offers 3.5 to 4 per cent interest. Large public sector banks, though, offer their savings account holders much lower interest rates. For example, only 2.70 per cent and 2.75 per cent are provided by the State Bank of India (SBI) and Bank of Baroda (BOB), respectively. Compared to public sector banks, the interest rates provided by small finance banks to their savings account holders are higher. AU Small Finance Bank and Ujjivan Small Finance Bank, for example, give up to 7 percent and 6.5 percent interest rates, respectively.
Interest Rates On Savings Accounts
|Sr No||Banks||ROI per annum in %||Minimum balance limit|
|1||IDBI Bank||3.00 to 3.50||Rs 500 to Rs 5000|
|2||Canara Bank||2.90 to 3.20||Rs 500 to Rs 1000|
|3||Punjab & Sind Bank||3.10||Rs 500 to Rs 1000|
|4||Indian Overseas Bank||3.05||Rs 500 to Rs 1000|
|5||Union Bank||3.00||Rs 250 to Rs 1000|
|6||Punjab National Bank||3.00||Rs 500 to Rs 2000|
|7||Central Bank of India||2.75 to 3.00||Rs 500 to Rs 2000|
|8||Bank of India||2.90||Rs 500 to Rs 1000|
|9||Indian Bank||2.90||Rs 500 to Rs 2500|
|10||Bank of Baroda||2.75||Rs 500 to Rs 2000|
Minimum balance limit
The minimum balance threshold for public sector banks' savings accounts starts from Rs 250 and is zero at the State Bank of India. Opposed to the criteria of major private banks in India, this is maintained much lower because public sector banks are backed by the Government of India and are more involved in branching out with their services to lower and middle class citizens. The minimum balance threshold is Rs 2,500 to Rs 10,000 for Axis Bank and HDFC Bank. The minimum balance threshold in the case of ICICI Bank is Rs 1,000 to Rs 10,000.
The minimum balance criteria for a regular savings account is taken into consideration and excluding the basic savings bank deposit account here. Select a bank which has a solid reputation, strong customer practices, a large branch network and city-wide ATM services; then only a stronger interest in savings accounts will be a benefit.