Best Bank for Savings Account

A savings account is a bank or credit union deposit account that allows you to save money and earn interest. Savings accounts are considered a safe and liquid investment option, and can be used for a variety of purposes, including saving money, earning interest, building an emergency fund, paying bills and making investments. With so many options available, this article helps you find the best bank for a savings account in India.

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Bank Interest Rates

Factors to Consider When Choosing a Savings Account

When choosing a savings account, you can consider things like:

1. Interest Rates
A higher interest rate helps your money grow and it varies by bank, location as well as the amount of money in your bank. The interest rates of SBI bank is 2.70% and that of private sector banks are usually up to 3.00% per annum. On the other hand, small banks usually pay higher interest rates for balance above 5 lakh.

For example, Equitas and Ujjivan Small Finance Bank pay 7.00% and 7.50% per annum for balances above Rs. 5 lakh and up to Rs. 50 crores whreas Utkarsh Small Finance Bank Limited pays 7.50% per annum for incremental balances above Rs. 5 lakh and up to Rs. 50 lakhs.  

2. Minimum balance
Banks set their own minimum balance requirements, and they may change them over time. They consider the cost of maintaining and servicing the accounts when setting these requirements. If you fall below the minimum balance, you may face penalties or additional charges. This can affect your overall account profitability.
The minimum balance requirement for a savings account varies by bank and location: 

For example, the minimum balance requirement of HDFC for Urban branches is Rs. 10,000 average monthly balance or a fixed deposit of Rs. 1 lakh for a minimum of 1 year and 1 day. In semi-urban branches it is Rs. 5,000 average monthly balance or a fixed deposit of Rs. 50,000 for a minimum of 1 year and 1 day and in rural branchesit is Rs. 2,500 average quarterly balance or a fixed deposit of Rs. 25,000 for a minimum of 1 year and 1 day 
On the other hand, SBI has waived the penalty for non-maintenance of the average monthly balance in savings accounts since 2020. State Bank of India (SBI) savings accounts do not have a minimum balance requirement.

3. Digital banking
Many banks allow customers to open savings accounts online or by using a mobile device. 
Digital banking in saving accounts allows customers to access their accounts, manage transactions, and perform other banking functions online or by using a mobile device. It helps customers and saving account holders in easy account management, customers can make fund transfers, pay bills, and make peer-to-peer payments. 

A bank providing Digital banking services often include several benefits like – Convenience where customers can bank from anywhere, at any time, Efficiency as it can save customers time and money and at the same time customers can also conduct transactions without using deposit slips. 

4. Transaction Fees and Additional Charges
When comparing savings accounts, you can consider things like Transaction fees. Some banks charge different fees for transactions based on the amount. 

For example, HDFC Bank charges Rs 3.50 per transaction for amounts up to Rs 1,000, Rs 5 per transaction for amounts above Rs 1,000 to Rs 1,00,000, and Rs 15 per transaction for amounts above Rs 1,00,000 to Rs 2,00,000. 
On the other hand, there are no fees for IMPS, NEFT, or RTGS transactions for State Bank of India (SBI) customers when done online through the YONO app, internet banking, or mobile banking.

Other fees comparison must be done too like monthly maintenance or service fee, out-of-network ATM fee, overdraft fee, insufficient funds fee, early account closing fee, debit card issuance charges, chequebook re-issuance charges, excessive transaction fees and SMS alert charges

5. ATM availability
When comparing savings accounts for ATM availability, you can consider the ATM network that the account is associated with and the number of transactions you can make per month for free. 

Savings accounts typically limit the number of transactions you can make per month, usually to 3–5. Exceeding this limit may result in a penalty fee. 

What are the Different Types of Savings Account?

Regular Savings Account
A regular savings account is a type of financial account that allows you to deposit money and earn interest on it. It's a simple and common type of savings account that's offered by banks and other financial institutions.

Joint Account
A joint savings account is a bank account that multiple people share and operate. All account holders have equal access to the funds in the account, and can deposit, withdraw, and manage transactions. 
Joint savings accounts are often used by family members, couples, or business partners to pool their resources and work towards shared financial goals. Woman's savings account: Can only be opened by a woman. 

Senior citizens' savings account
A Senior Citizen Savings Scheme (SCSS) account is a government-backed savings account that provides a steady income for senior citizens and retired personnel. The interest rate is 8.2% per annum, but is revised quarterly based on factors like inflation and market conditions. Interest is paid on the 1st working day of April, July, October, and January. Deposits in SCSS qualify for deduction under section 80-C of the Income Tax Act. 

Minor’s Saving Account
A minor's savings account, also known as a child savings account, is a financial account for people under the age of 18. The purpose of these accounts is to help children develop good money habits, such as saving, managing, and spending money.

Women’s Saving Accounts
Women's savings accounts can be opened by women of any age, income, or profession. They can help women build a safety net for emergencies and face financial challenges, such as the gender pay gap and career breaks. Women's savings accounts may offer higher interest rates than regular savings accounts. The accounts may have low or zero minimum balance requirements. Women's savings accounts may offer insurance benefits, such as accidental death or hospitalization cover.
 

Detailed Overview of Top Savings Accounts

1. State Bank of India (SBI)

SBI savings accounts have no minimum balance requirement, and most accounts have no maximum balance. You can use your debit card to check your balance, withdraw money, pay insurance premiums, shop, donate, and make card-to-card transfers.

Benefits:

• Mobile banking: Transfer funds, make interbank mobile payments, pay utility bills, recharge your mobile, and more.
• Net banking: Open and close fixed deposit and recurring deposits, transfer funds, pay utility bills, and more.
• Branch locations: SBI has branches all over the country, making them easy to reach.
• Interest rates: Competitive interest rates on your savings.
• Customer segmentation: Based on relationship value with automatic upgrades/downgrades.

SBI, a household name, offers an easy-to-use YONO app and no minimum balance requirements. It’s ideal for people looking for reliability and accessibility.

2. HDFC Bank

HDFC Bank offers a range of savings accounts, including Regular Savings Account, Zero Balance or Basic Savings Account, and Women's Savings Account. Customers can open a savings account quickly and easily through the InstaAccount process, which is available through the HDFC Bank app or website. Customers can complete their Know Your Customer (KYC) formalities remotely using the Video KYC facility.

Other benefits:

• Free demand drafts on HDFC Bank locations
• 50% discount on locker rental
• Free lifetime BillPay & InstaAlerts
• Easy transactions for sending and receiving payments

3. Kotak Mahindra Bank

Kotak Mahindra Bank offers a variety of savings accounts with different features and benefits:

• Kotak Classic Savings Account: Up to 4% interest, free access to domestic VISA ATMs, a free Classic Debit Card, and free net banking, mobile banking, and phone banking.
• Nova Savings Account: Available in rural and semi-urban branches with customized banking services and a Classic Debit Card.
• Pro Savings Account: Designed for women with exclusive offers on Nykaa and Urban Company, up to 1500 Reward Points, and special offers on Kotak Silk Platinum Debit Card spends.
• Kotak 811 Digital Bank Account: Comes with a virtual debit card for online payments.

4. RBL Bank

RBL Bank offers a variety of savings accounts with different features:

• Basic Savings Account: A zero-balance account with no monthly balance requirement. Includes a free Rupay Debit Card with cash withdrawal limit of INR 30,000 and ATM withdrawal limit of INR 50,000, two free cheque books per year, and online, phone, mobile, SMS, and internet banking services.
• Prime Savings Account: Includes higher interest rates, unlimited ATM transactions, and a Titanium MasterCard Debit Card.
• Digital Savings Account: Can be opened online with a PAN and Aadhaar number.
• Executive Savings Account: A zero-balance salary account with unlimited free cash withdrawals at RBL Bank ATMs.
• GO Digital Savings Account: A modern savings account with benefits worth INR 10,000.

In Summary

Choosing the best bank for a savings account isn’t just about picking the one with the highest interest rate. It’s about finding the perfect balance of convenience, features, and value for your money. So, the next time you ask yourself, “Which savings account is right for me?” consider what matters most—flexibility, earnings, or services. Happy saving!