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IDFC Bank No More Offer ★ Highest Interest on Savings Account in India ★ What Next? ★ ApnaPlan.com – Personal Finance Investment Ideas

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In today’s situation most of the big banks like SBI, ICICI Bank, Union Bank of India, Punjab National Bank (PNB) give less than 3% interest on savings account. Till October 2011, all banks were required to pay a minimum interest of 4%. However, the Reserve Bank of India in October 2011 capped interest paid by banks on savings accounts in the hope that it would make the market more competitive. However, with the falling interest rates, almost all the big banks have reduced their interest rate on savings account to less than 3%.

Highest savings account interest being offered Ratnakar Bank and Bandhan Bank at 6% for balance above Rs 1 lakh.

Most small finance banks also offer higher interest rates on savings accounts. Utkarsh Small Finance Bank Offers 7.25% on balance above Rs.10 lakhs. Utkarsh Small Finance Bank and Ujjivan Small Finance Bank Offers 7.00% interest on savings account for balances above Rs 1 lakh.

best interest rate on savings account in india

Highest interest on savings account

The table below shows the interest rates offered by banks on their savings accounts in different balances. we have shed light on Banks that offer more than 4%.(X means that no information was available on the Bank’s website as on the research date)

interest of government banks on savings account

No government-owned bank gives more than 4% interest on savings account.

Bank 1 Lac . By 1.5 million 5 – 10 lakh 10+ lakhs
Bank Of Baroda 2.75% 2.75% 2.75% 2.75%
bank of india 2.90% 2.90% 2.90% 2.90%
Bank Of Maharashtra 2.75% 2.75% 2.75% 2.75%
Canara Bank 2.90% 2.90% 2.90% 2.90%
Central Bank Of India 2.90% 2.90% 2.90% 2.90%
Indian Bank 2.90% 2.90% 2.90% 2.90%
Indian Overseas Bank 3.05% 3.05% 3.05% 3.05%
Jammu and Kashmir Bank 2.90% 2.90% 2.90% 2.90%
post office savings account 4.00% 4.00% 4.00% 4.00%
Punjab And Sind Bank 3.10% 3.10% 3.10% 3.10%
Punjab National Bank 3.00% 3.00% 3.00% 3.00%
state Bank of India 2.70% 2.70% 2.70% 2.70%
UCO Bank 2.50% 2.50% 2.50% 2.50%
Union Bank of India 3.00% 3.00% 3.00% 3.00%
interest of government banks on savings account

Private banks interest on savings account

Some private banks offer more than 4% on their savings account:

  1. Bandhan Bank
  2. IDFC First Bank
  3. Indus Ind Bank
  4. Ratnakar Bank
  5. Yes Bank
banks 1 Lac . By 1.5 million 5 – 10 lakh 10+ lakhs
axis Bank 3.00% 3.00% 3.00% 3.00%
Bandhan Bank 3.00% 6.00% 6.00% 6.00%
Catholic Syrian Bank 2.10% 2.75% 2.75% 2.75%
city ​​union bank 3.50% 3.75% 3.75% 4.00%
DCB Bank 3.25% 3.25% 3.25% 3.25%
Dhanalakshmi Bank 3.00% 3.00% 3.00% 3.00%
federal bank 2.50% 2.50% 2.50% 2.50%
HDFC bank 3.00% 3.00% 3.00% 3.00%
ICICI Bank 3.00% 3.00% 3.00% 3.00%
IDBI Bank 3.00% 3.00% 3.00% 3.00%
IDFC First Bank 4.00% 4.50% 4.50% 5.00%
Indus Ind Bank 4.00% 5.00% 5.00% 6.00%
Karnataka Bank 2.75% 2.75% 2.75% 2.75%
Karur Vysya Bank 2.75% 2.75% 3.25% 3.50%
Mahindra Bank Box 3.50% 4.00% 4.00% 4.00%
Nainital Bank 3.00% 3.00% 3.00% 3.00%
Ratnakar Bank 4.75% 6.00% 6.00% 6.50%
South Indian Bank 2.35% 2.75% 2.75% 2.75%
Tamil Nadu Mercantile Bank 3.00% 3.00% 3.00% 3.25%
Yes Bank 4.00% 4.75% 4.75% 5.50%
Private banks interest on savings account

small financial banks interest on savings account

Almost all small finance banks offer more than 4% on their savings account except Capital Small Finance Bank.

banks 1 Lac . By 1.5 million 5 – 10 lakh 10+ lakhs
AU Small Finance Bank 3.50% 5.00% 6.00% 7.00%
Capital Small Finance Bank 3.75% 3.75% 3.75% 3.75%
ESAF Small Finance Bank 4.00% 5.50% 5.50% 6.50%
Fincare Small Finance Bank x x x x
Jana Small Finance Bank 3.50% 6.00% 6.00% 7.00%
North East Small Finance Bank Finance 4.00% 4.00% 5.00% 5.00%
Suryoday Small Finance Bank 4.00% 6.25% 6.25% 6.00%
Ujjivan Small Finance Bank 4.00% 7.00% 7.00% 7.00%
Utkarsh Small Finance Bank x 7.00% 7.00% 7.00%
Utkarsh Small Finance Bank 5.00% 6.00% 6.00% 7.25%
small financial banks interest on savings account

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As you can see from the above income tax calculation, salary components and salary structure play a very important role in how much income tax you pay. We have come up with some customized pay structure using which you can No income tax to be paid even with CTC of more than Rs 20 lakh.

Payments Bank Interest Rate on Savings Account

Payment banks are allowed to keep deposits up to Rs 1 lakh in their savings account. All of them offer very low interest rates:

  1. Airtel Payment Bank – 2.50%
  2. Fino Payments Bank – 2.75%
  3. Paytm Payment Bank – 2.75%
  4. Post Office Payment Bank – 2.75%

Updated April 11, 2021

How is interest calculated on savings account?

We tell you how interest on savings account is calculated and when it is paid. For example we have interest rate offered by Bandhan Bank.

Bandhan Bank - Savings Account Interest Rate
Bandhan Bank – Savings Account Interest Rate
  • If you have 5 lakh rupees in your account then this is how your interest will be calculated and paid.
  • Interest on first Rs 1 lakh @ 3% for 1st quarter = Rs 750
  • Interest on additional 4 lakh @ 6% for 1st quarter = Rs.6,000
  • Total interest paid in 1st quarter = Rs 750 + 6,000 = Rs 6,750

Interest is paid on 30 June, 30 September, 31 December and 31 March in each calendar quarter. Interest is calculated on a daily basis, based on the balance in the account at the end of the day.

What is the benefit of higher interest on savings account?

Additional interest: If you keep 1 lakh in your savings account, then at 4% you will get Rs 333.33 as interest per month, while with 7% you will get Rs 583.33. so You will earn extra Rs. 250 per lakh per month.

Tax efficient: In the 2012 budget also the Finance Minister had said Discounted interest income up to Rs.10,000 From Savings Account under each financial year section 80TTAT. So there will be situations where Putting money in a savings account would be better for people in higher tax brackets than fixed deposits.

Budget 2018 presented New Section 80TTB. According to this, senior citizens can claim tax exemption of up to Rs 50,000 on interest income from bank/post office fixed deposits, recurring deposits or savings accounts.

Should you get a new bank account?

The next question is, should you go to these banks to take advantage of the increased interest rates on your savings account?

The answer depends on a few factors namely:

1. How much money do you keep in your savings bank account?

If you are someone who has a large balance in a savings account, you can opt for accounts that offer higher interest rates. An additional account doesn’t make sense for everyone with very significant balances.

2. Do you wish to pay the charges associated with the new savings account?

Even if you have a high balance in your account, do you want to get an additional account and keep track of all the new charges levied on the accounts by the banks. Also you have to maintain minimum balance.

3. Your tax bracket?

If you are in the 30% tax bracket It makes sense to get some money in a savings account at higher interest rates. Compared to crowdfunding for short term fixed deposits.

Do you know about hidden charges in banks?

Do you know that you pay a few thousand rupees every year in hidden charges of banks. This can range from more known fines to lesser known fines for not maintaining the minimum balance. ICICI Bank POSDEC Charges. Charges can be made for ATM usage, branch visits, check book etc. Must read our article Hidden charges in banks and what can you do about it?

the option:

Most banks offer sweep in facility Where the amount in excess of the pre-specified amount automatically goes to the fixed deposit. So you can take advantage of this instead of going for a new account. But remember that interest earned on sweep in account is fully taxable as your interest income from fixed deposits.

Savings Account Interest Rates Latest News

IDFC Bank has reduced the interest rate from 6% to 4% to 5% as can be seen in the table below.

IDFC First Bank Savings Account Interest Rate - 1 May 202120
IDFC First Bank Savings Account Interest Rate – 1 May 2021

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of knews.uk and knews.uk does not assume any responsibility or liability for the same.

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