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Savings Account Interest Rates
Savings accounts serve as a vital avenue for individuals new to banking and investing, offering opportunities for both short-term and long-term savings. The interest rates on these accounts typically range from 2.50% per annum to 7.00% per annum, contingent on the amount of savings.Before opening a savings account, it's crucial to familiarize oneself with the interest rates and the specific account types offered by the bank, alongside other associated facilities. Let's look at the details of savings account interest rates offered by banks.
Savings Account Interest Rates for Deposits up to Rs. 1 Lakh
For deposits up to Rs 1 Lakh, most banks offer relatively lower interest rates. However, here's a list of banks that provide the best savings account interest rates:
Bank | Interest Rate |
|---|---|
Fincare Small Finance Bank Limited | 3.51% |
Jana Small Finance Bank Limited | 3.50% |
RBL Bank Limited | 4.25% |
Utkarsh Small Finance Bank Limited | 4.25% |
Suryoday Small Finance Bank Limited | 3.50% |
YES Bank | 4.00% |
ESAF Small Finance Bank Limited | 4.00% |
IDFC First Bank Limited | 4.00% |
North East Small Finance Bank Limited | 4.00% |
IndusInd Bank | 3.50% |
Savings Account Interest Rates for Deposits Ranging From Rs. 1 Lakh to Rs. 5 Lakhs
Interest rates vary depending on the deposited amount. Here are the top banks offering the best savings account interest rates in various deposit ranges:
Bank | Interest Rates |
|---|---|
DBS Bank | 7.00% (Above Rs. 4-5 Lakh) |
Jana Small Finance Bank | 7.00% (More than Rs. 1 lakh and up to Rs. 50 lakh) |
Utkarsh Small Finance Bank | 6.50% |
Suryoday Small Finance Bank | 6.75% |
Bandhan Bank | 6.00% |
Equitas Small Finance Bank | 5.25% |
Ujjivan Small Finance Bank | 6.00% |
Fincare Small Finance Bank | 7.11% (Above 2 lakh and including 5 lakh) |
RBL Bank | 5.50% |
YES Bank | 4.25% |
DBS Bank, Jana Small Finance Bank and Fincare Small Finance Bank provide savings accounts with the highest interest rates.
Savings Account Interest Rates for Deposits Ranging From Rs. 5 Lakhs to Rs. 10 Lakhs
Bank | Interest Rates |
|---|---|
Jana Small Finance Bank | 7.00% (More than Rs. 1 lakh and up to Rs. 50 lakh) |
Equitas Small Finance Bank | 7.00% (Above Rs. 5 Lakh and up to Rs. 20 Crore) |
Ujjivan Small Finance Bank | 7.00% |
Fincare Small Finance Bank | 7.25% (Above 5 lakh and including 25 lakh) |
Utkarsh Small Finance Bank | 6.50% |
Suryoday Small Finance Bank | 7.00% |
6.25% | |
Bandhan Bank | 6.00% |
DBS Bank | 6.00% |
RBL Bank | 5.50% |
Jana Small Finance Bank, Equitas Small Finance Bank, Ujjivan Small Finance Bank, Fincare Small Finance Bank, Utkarsh Small Finance Bank and Suryoday Small Finance Bank provide savings accounts with the highest interest rates.
Savings Account Interest Rates for Deposits Ranging From Rs. 10 Lakhs to Rs. 1 Crore
Bank | Interest Rates |
|---|---|
Ujjivan Small Finance Bank | 7.00% |
Utkarsh Small Finance Bank | 7.25% (Incremental balance above Rs. 25 lakh up to Rs. 10 crore) |
DCB Bank | 7.25% (From Rs. 50 lakh to less than Rs. 2 crore) |
AU Small Finance Bank | 7.00% (Balances from Rs. 25 lakh to less than Rs. 1 crore) |
Fincare Small Finance Bank | 7.50% (Above 50 lakh and including 2 crore) |
Jana Small Finance Bank | 7.25% (More than Rs. 50 lakh and up to Rs. 10 crore) |
ESAF Small Finance Bank | 5.50% (Above Rs.15 lakh) |
RBL Bank | 7.00% (Above Rs. 25 lakh and up to Rs. 2 crore) |
Suryoday Small Finance Bank | 7.00% (Above Rs. 50 lakh and up to Rs. 1 crore) |
Bandhan Bank | 6.25% |
Most banks provide their best savings account interest rates for this range of deposits.
Savings Account Interest Rates for Deposits above Rs. 1 Crore
Bank | Interest Rates |
|---|---|
DCB Bank | 7.25% (On balances from Rs. 50 Lakh to less than Rs. 2 Crore) |
Equitas Small Finance Bank | 7.00% (Above Rs. 5 Lakh and up to Rs. 50 Crore) |
Utkarsh Small Finance Bank | 7.25% (Incremental balance above Rs. 25 lakh up to Rs. 10 Crore) |
Ujjivan Small Finance Bank | 7.00% (Above Rs. 5 Lakh to Rs. 25 Crore) |
SBM Bank | 6.75% (Balance more than Rs. 50 Lakh to Rs. 50 Crore) |
Bandhan Bank | 6.50% (Daily Balance above Rs. 50 crore to Rs. 100 Crore) |
ESAF Small Finance Bank | 6.50% |
Jana Small Finance Bank | 7.25% (More than Rs. 50 Lakh and up to Rs. 10 Crore) |
YES Bank | 6.25% (More than or equal to Rs. 1 Crore to < Rs. 10 Crore) |
Shivalik Small Finance Bank | 6.00% |
For this range of deposits also, most banks provide their best savings account interest rates.
How is Interest Calculated on Savings Account Deposits?
Interest calculations depend on the balance and respective interest rates offered by the bank. Consider the following example from DBS Bank's digibank:
Amount | Interest Rates |
|---|---|
Rs. 1 Lakh | 3.25% |
Rs. 1 Lakh - 2 Lakh | 3.50% |
Rs. 2 Lakh - 3 Lakh | 4.25% |
Rs. 3 Lakh - 5 Lakh | 7.00% |
Rs. 5 Lakh - 10 Lakh | 6.00% |
Rs. 10 Lakh - 20 Lakh | 5.50% |
Rs. 20 Lakh - 1 Crore | 5.00% |
Above Rs. 1 Crore | 3.00% |
Let us take the example of interest in the case of maintaining Rs. 3,00,000 throughout the year:
Interest | Amount |
|---|---|
Interest for Rs. 1 Lakh at 3.25% | Rs. 3,250 |
Interest for Rs. 1 Lakh at 3.50% | Rs. 3,500 |
Interest for Rs. 1 Lakh at 4.25% | Rs. 4,500 |
Total interest earned | Rs. 11,250 |
Total amount: | Rs. 3,11,250 |
Conclusion
Savings account interest rates vary based on deposited amounts and banks' offerings. It's essential to research and choose the best-suited account to maximize your returns while ensuring your savings remain safe. Keep in mind that these rates are subject to change over time. By understanding the nuances of savings account interest rates and comparing offerings from different banks, you can make informed decisions to effectively grow and manage your savings.
FAQs on Savings Account Interest Rates:
1. What are savings account interest rates?
Savings account interest rates are the annualized percentage returns banks offer on the funds deposited in savings accounts.
2. Why do savings account interest rates vary based on deposited amounts?
Banks offer varying rates to incentivize different levels of savings and to attract customers to maintain specific balances.
3. Are the savings account interest rates fixed?
Interest rates on savings accounts can change periodically, based on market conditions and the bank's policies.
4. Can I open multiple savings accounts to maximize interest earnings?
Yes, you can open multiple savings accounts in different banks to take advantage of varying interest rates. However, it is required to manage them effectively.
5. Is the interest earned on savings accounts taxable?
Yes, the interest earned on savings accounts is taxable as per the Income Tax Act.
6. What factors should I consider when choosing a savings account?
Apart from interest rates, consider factors like minimum balance requirements, additional facilities, fees, and customer service when choosing a savings account.
7. Can interest rates on my savings account change after I open it?
Yes, interest rates can change over time due to market conditions and bank policies. It's advisable to stay updated with the bank's announcements.
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