Sometimes, we tend to keep large balances in our savings bank (SB) account. This may be either as a precautionary measure or for any reason. These balances tend to earn an interest rate, which is mostly around 4 per cent.
Public sector banks or government banks do not offer an interest rate beyond 4 per cent. But, savings bank interest rates in the country are deregulated and it is possible for investors to earn interest rate of more than 4 per cent.
|Yes Bank||Kotak Mahindra||Ratnakar Bank||IndusInd Bank|
|6% per annum||6% per annum||7.1% for balances above Rs 10 lakhs. 6.1% for balances between Rs 1-10 lakhs. 5.1% upto Rs 1 lakh.||6% above Rs 10 lakhs.
5% between Rs 1-10 lakhs.
4% up to Rs 1 lakh.
Until recently, Yes Bank was offering an interest rate of 7 per cent, which almost matched the interest rate of some bank fixed deposits. However, the bank decided to reduce the interest rate to 6 per cent, probably looking at the sharp decline in interest rates in the economy.
So, you can still get as much as 6 per cent on your savings bank account (SB) balances and this is perhaps the best interest rate on SB account.
Kotak Mahindra Bank
Kotak Mahindra Bank offers an interest rate of 6 per cent per annum on balances in the savings account. This is at par with what Yes Bank is offering and is one of the best interest rates on savings account (SB) banks are offering.
IndusInd Bank is also offering an interest rate of 6 per cent, but, that is only on balances above Rs 10 lakhs. If your balance drops between Rs 1-Rs 10 lakh, your interest rate drops to 5 per cent and below Rs 1 lakh, it would be 4 per cent. At 4 per cent it would be the same rate that most other banks are offering.
RBL Bank (Ratnakar Bank Ltd)
RBL Bank offers an interest rate of 7.1 per cent per annum, if you maintain a balance above Rs 10 lakhs. This is the highest and the best interest rate on a SB account.
If it falls under Rs 10 lakhs the interest rate drops to 6.1 per cent and 5.1 per cent on balance up to Rs 1 lakhs on a daily balance basis.
Interest rates on savings bank account is exempt from tax up to an amount of Rs 10,000. If you earn any interest above this amount, there would be a TDS that is deducted by the bank. So, a good interest rate also comes with tax liability, which you should not forget.