Public sector banks provide savings accounts at significantly cheaper interest rates than many emerging private and small finance lenders bid. It's essential to have knowledge about how much interest the banks bid to deposit your capital in the savings account. In fact, multiple savings accounts are operated by almost all salaried professionals in order to hold one savings account for salary deposits and investments whereas another one is managed to cover loan repayments, credit card payments, regular living costs and emergency needs. And in particular, savings bank accounts bear lower interest rates opposed to fixed deposits. IDBI Bank and Canara Bank, for instance, offer interest rates on their savings accounts of up to 3.5 percent and 3.2 percent respectively.
As opposed to what major private banks bid, these returns are competitive. For example, 3-3,5 percent interest is offered by HDFC Bank and ICICI Bank. Major public sector lenders, though, offer their savings account holders much lower interest rates. For example, only 2.70 percent and 2.75 percent 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 much better. AU Small Finance Bank and Ujjivan Small Finance Bank, for example, bid up to 7 percent and 6.5 percent interest rates, respectively.
|Banks||Min and Max balance||ROI per annum|
|IDBI Bank||Rs 500 to Rs 5000||3.00% to 3.50%|
|Canara Bank||Rs 500 to Rs 1000||2.90% to 3.20%|
|Punjab & Sind Bank||Rs 500 to Rs 1000||3.10%|
|indian Overseas Bank||Rs 500 to Rs 1000||3.05%|
|Central Bank of India||Rs 500 to Rs 2000||2.75% to 3.00%|
Minimum and maximum balance limit
The minimum balance threshold for public sector banks' savings accounts starts at Rs 250, and it is zero at the State Bank of India. Opposed to the criteria of leading private banks in India, this is maintained much lower since they are government-backed banks and are more concerned in coming out with their services for lower and middle-income citizens. The minimum balance threshold is Rs 2,500 to Rs 10,000 for Axis Bank and HDFC Bank, whereas in case of ICICI Bank it is capped at Rs 1,000 to Rs 10,000 respectively.
The threshold of minimum balance for regular savings accounts is taken into consideration and excluding basic savings bank deposits. Apart from higher interest on savings accounts, it will be best if you opt for a bank which has a long stellar performance, strong services for customers, a large branch network and city-wide ATM services as well.