Savings accounts help customers park their money safely with banks. Customers do earn an interest income on the account but generally savings bank accounts offer modest interest rates as compared to fixed deposit (FD) accounts. The interest earned is tax-free up to Rs 10,000 per year. Customers also get ATM and debit card facilities on savings bank accounts. Key banks like State Bank of India (SBI), ICICI Bank, and HDFC Bank offer the facility of opening savings bank accounts. Post offices across the country also offer the facility of opening savings accounts.
Given below is a comparison of savings bank accounts interest rates offered by SBI, ICICI Bank, HDFC Bank, and post offices
State Bank of India (SBI) savings bank accounts
SBI offers deposit lockers, nomination facility, SMS alerts and e-statements to savings bank account holders, it said on sbi.co.in.
Interest rates offered on SBI savings bank accounts
|Particulars||Rate of Interest|
|Saving Deposits Balance upto Rs. 1 crore.||3.50% p.a|
|Saving Deposits Balance above Rs. 1 crore.||4.00% p.a|
ICICI Bank savings bank accounts
Savings bank account interest are calculated on the basis of end of day account balance maintained in savings bank account, at the interest rate specified by ICICI Bank from time-to-time, stated the bank on its website, icicibank.com.
With effective from 19th August 2017, the savings account interest rate offered by ICICI Bank is:
3.5 per cent for end of day account balance of below Rs 50 lakh.
4 per cent for end of day account balance of Rs 50 lakh and above.
Interest is calculated on a daily basis on the daily closing balance in the account, at the rate specified by ICICI Bank in accordance with Reserve Bank of India directives. The interest amount calculated is rounded off to the nearest rupee. With effect from March 30, 2016, interest is being paid quarterly in March, June, September and December, ICICI Bank said.
HDFC Bank savings bank accounts
HDFC Bank pays interest on savings bank account balances on a quarterly basis. The interest is calculated on the daily balances maintained in the account, said the bank on its website, hdfcbank.com.
Interest rates offered by HDFC Bank on savings bank accounts
|Savings Bank balance||Revised Rate w.e.f 19th August, 2017|
|Rs. 50 lakh and above||4%|
|Below Rs 50 lakh||3.50%|
Post Office savings accounts
You require a minimum of Rs 20 to open a savings account with India Post. A cheque facility is available if the account is opened with Rs 500 and for this purpose a minimum balance of Rs 500 in the account is to be maintained, according to indiapost.gov.in.
Interest rate offered on savings accounts by India Post is 4 per cent per annum on individual / joint accounts.
Savings accounts may not be the best option for investment purposes. Interest rates on public provident funds, fixed deposits, and national pension system are higher than savings bank accounts. Customers who do not mind taking a market-related risk may consider investing in liquid funds, shares and bonds.