What is a Savings account?
A savings account in any Indian bank is a simple and secure mode of storing your hard-earned money and earning regular interest on the deposit. A saving bank account provides high liquidity as you can withdraw (and deposit) money into the account as and when the need arises. There are multiple types of savings account, which provide their own benefits. This article discusses the types of savings account, along with the best banks for opening a savings bank account in India.
Why open a Savings account?
A saving account keeps your money secure and is much safer than keeping all your money at home. Additionally, the 2016 demonetisation drive has it more advisable to keep most of your money in a secure bank account. With all the debit card, ATM, and online banking facilities provided by most Indian banks, a saving bank account has emerged as the simplest and safest mode of doing financial transactions in India. Additionally, depending on the type of saving bank account and the bank, you can earn an attractive bank interest on savings account, along with availing convenient cheque book and automated money transfer facility to make payments or transfer funds.
How to open a Savings account?
A savings account in India can be opened in any Indian or foreign bank, post office, or any reputed financial institution. You can open a new savings account within a few hours by submitting your application and your supporting documents to the bank officials. In the earlier days, new applicants needed to have an introducer with an existing account in the same bank to be able to open your account, but now this is not mandatory.
With the recent growth in mobile banking, many leading banks allow you to open an online savings account without any visit to any physical bank branch.
Features and Benefits of a Savings Account
Among the major benefit and objective of opening a savings account is to promote savings and manage your finances wisely. A savings account in India can be opened with a deposit ranging from zero balance to 5000/-. As an account holder, you have the flexibility of depositing and withdrawing any amount into your bank account. Depending on the bank, you can also earn savings account interest ranging from around 3-6% annually.
Depending on the type of account that you open, a saving bank account in any bank can offer different features and benefits.
Features of a savings bank account include:
A savings bank account provides customers with the following benefits:
Types of Savings Accounts in India
Depending on individual needs and objectives, customers can open and operate different types of savings accounts in Indian banks, including:
Also known as a basic savings account, any individual in India can open a regular savings account in the bank of their choice. In most banks, regular savings accounts require the maintenance of a minimum account balance, failing which the bank charges you a penalty. Most banks also provide regular savings account holders with facilities such as cheque book and debit card.
This savings account is only available for salaried individuals and is usually used by companies to deposit their employee’s salaries directly into the individual accounts. Some of the additional benefits offered by salary accounts include zero balance savings, high interest savings, and easier availability of bank loans and other facilities. Most banks convert salary accounts into regular accounts if no salary is credited to the account for more than 3 months.
Salary accounts are available at most of the leading banks in India including Kotak Mahindra bank, ICICI bank, and HDFC bank.
This type of savings account is available only for senior citizens above the age of 60 years. Some benefits of senior citizen accounts include higher interest rates, no requirement of maintaining minimum balance, and higher returns on term deposits. Some banks offering senior citizen account facility include Yes bank, Kotak Mahindra bank, and State bank of India.
A joint savings account is operated by 2 (or more) account holders such as husband and wife and even other family members. Each of the account holders are issued separate cheque books and debit cards and they can independently perform transactions on the bank account. Joint savings account is offered by most banks in India.
This type of saving account is opened and operated by a child’s parent or guardian on the behalf of the minor until they reach an age of 18. Leading banks in India offering a child saving account to their customers include HDFC bank, ICICI bank, and Axis bank.
Aimed to promote savings, a zero-balance account is a savings bank account where account holders are not charged any penalty for not maintaining the minimum balance in their accounts.
This type of savings account is only available for women and is designed to encourage more Indian women to open their own bank accounts. Compared to regular savings account, this savings account offers selected benefits such as higher rate of interest, discounts on other bank products, and personal insurance coverage.
This type of savings account is only available for college students in India. Some of the benefits provided by student saving accounts include zero balance facility, net or mobile banking facility, and easier access to student loan facility. Some of the banks offering a student saving account facility in India include State bank of India, DigiBank, and Vijaya bank.
Launched by the current Indian government under Prime Minister Narendra Modi, the PMJDY account is designed to encourage the weaker sections of the Indian society to open bank account. This savings account is available with benefits such as no requirement of maintaining minimum account balance, debit card facility, and a maximum of 4 cash withdrawals in a month. An insurance cover of 30,000/- and an accidental cover of 1 lakh is also provided to the account holder.
How to Check Account Balance
As a savings account holder, you have multiple ways of checking your account balance. The available modes are:
A bank passbook is the most traditional method of knowing your account balance. You have to simply walk into your bank branch and get the passbook updated to current date. Generating your yearly or half-yearly bank statement is another method of checking account balance and other transactions.
If your bank has issued a debit card, you can walk into any bank ATM and check your account balance in quick time.
Technology-savvy customers can also check their account balance through Internet banking. To login to their online banking account, customers must enter their user name (or unique customer ID) along with the correct account password.
Mobile banking is the fastest and most convenient way of checking your account balance. If your bank support mobile banking, all that you have to do is to install the banking app on your smartphone and configure it to your account details.
Best Savings Accounts in India
This section discusses the best banks for opening a savings account in India, including which bank gives highest interest rate on saving account for customers.
State Bank of India
State Bank of India or SBI offers the SBI Savings Account for Indian citizens, which is an insta saving account. Along with a complementary RuPay debit card and paperless account opening, SBI offers an interest rate of over 3.5% for deposits of up to 1 crore. Customers can also benefit from the large number of SBI branches and ATMs all across the country.
ICICI Bank offers a regular ICICI saving account with a daily cash withdrawal limit of 50,000/-. Along with features such as free Internet and mobile banking, ICICI customers are also provided with a complementary smart shopper debit card. The ICICI saving account interest rate ranges from 3.5% for balances (up to 50 lakhs) to 4% for balances above 50 lakhs.
Among the leading banks in India, HDFC Bank offers 19 different types of savings accounts including regular savings account, salary account, basic saving account, women’s saving account, and a senior citizen account. With over 4,700 branches and 12,000 ATMs all across the country, HDFC bank offers interest rate ranging from 3.5% for balance of up to 50 lakhs to 4% for balance above 50 lakhs.
Kotak Mahindra Bank
Rated among the best savings account in the country, Kotak Mahindra bank offers the 811 Kotak saving account with features such as zero balance, virtual debit card facility, and availability of convenient mobile banking facility. The Kotak saving account interest rate ranges from:
Previously known as UTI bank, the Axis Bank saving account facility includes bank accounts such as the ASAP Instant Savings account, Prime Savings account, and the Women’s savings account, among others. With over 3,700 branches and 12,800 ATMs all across the country, Axis Bank saving account interest rate ranges from:
Among the leading banks in India, Canara bank offers different types of savings account for every section of the Indian society including the Canara Champ Deposit Scheme (for children) and the Canara Jeevandhara account for senior citizens. The bank offers an interest rate of 4% on all its savings bank accounts.
Punjab National Bank or PNB
Punjab National Bank (also known as PNB) is among the oldest banks in the country. It offers savings account designed for general customer, defence personnel, senior citizens, along with minor children accounts and women’s accounts. PNB offers an interest rate of 3.5% annually on its deposit balance (of less than 50 lakhs) and 4% for accounts with balance of over 50 lakhs.
IndusInd bank offers a wide variety of savings bank accounts to its customers including the IndusInd Privilege Active Savings Account that lets you earn an interest of 6% annually. Other IndusInd bank saving account facilities including the choice of selecting your own account number, along with a Platinum Plus debit card and free fund transfer convenience. IndusInd Bank saving account interest rate ranges from:
The IndusInd bank saving account minimum balance is 10,000/- (or more), failing to maintain which attracts a non-maintenance charge of 350/-.
Development Bank of Singapore (DBS)
DBS offers 4 types of savings accounts including Digibank by DBS (which is zero-balance account that can be opened digitally), DBS Global Indian account (for NRI bankers), and a Basic savings bank account.
DBS offers attractive interest rates on its deposits:
Formerly known as Ratnakar Bank (founded in the year 1943), RBL Bank offers a wide variety of savings accounts to its customers. The RBL savings account offers many banking features including free cheque books, internet and mobile banking facilities for online customers, debit card, and electronic clearing facilities. The RBL Bank saving account interest rate ranges from:
Among the popular banks in India, Dena bank offers a variety of saving bank accounts including the premium saving account, the Dena Jeevan SB account (that offers life insurance cover for its account holders), and the Dena Minors Saving account (for minors above the age of 10). Dena bank offers an interest rate of 3.5% on balance of up to 50 lakhs and 4% for balance above 50 lakhs
Among the recently-established banks in India, Yes bank offers a variety of savings bank account for different customers including premium accounts and accounts for senior citizens, children, defence personnel, and women. Yes bank also offers the best interest rates among contemporary banks at:
Standard Chartered Bank
Among the leading savings account banks in India, Standard Chartered bank offers a variety of bank account including its SC Digital Savings account (with a monthly average balance of 10,000/-), Employee banking account, and SuperValue account. Other facilities provided by the bank include 24×7 phone banking support and mutual fund investments.
Standard Chartered bank provides an interest rate of 3.5% on account balance of up to 50 lakhs and 4% on an account balance of above 50 lakhs.
HSBC Bank offers primarily 2 types of savings bank account, namely the HSBC Basic Savings Bank Deposit Account (BSBDA) and the HSBC Basic Saving Deposit (BSBD) for small accounts. Both these basic savings account does not require the maintenance of any minimum account balance and can be opened without any initial cash deposit.
Lakshmi Vilas Bank
Established in the year 1926, Lakshmi Vilas bank is among the fastest growing banks in India. Along with a basics saving account that requires zero balance, Lakshmi Vilas bank offers the “Lakshmi Mahila Power” savings account designed for women and the “Lakshmi Saving Youth Power” account for young individuals aged between 12 to 24 years. The bank offers an interest rate ranging from 4-7% based on average balance and type of account.
The Bandhan bank offers a variety of saving bank account designed to cater to different needs of banking customers. This regional bank offers an annual interest rate of 4.25% (for account balance of less than 1 lakh) and 6% (for account balance of more than 1 lakh).
IDBI Bank offers its customers a range of savings bank accounts with benefits including fast fund transfer, bill payments, attractive interest rates, international debit card, mobile banking facility, and other value-added services.
IDFC Bank allows customers to open an online savings account with a deposit of just 25,000/-. With facilities such as zero-balance banking, IDFC Bank provides multiple benefits including a lifetime-free VISA debit card, unlimited and free fund transfer, and free transactions on any bank ATM across the country. The bank also offers 4% interest on any account balance, which is paid quarterly.
Bank of Baroda
Among the leading nationalized banks in India, Bank of Baroda (or BoB) offers a host of saving bank accounts for their customers, including premium saving accounts, salary accounts, basic saving accounts, and accounts for senior citizens and women.
Bank of Baroda also offers an interest rate of 3.5% per annum on any bank balance of less than 50 lakhs and 4% on accounts with an average balance of over 50 lakhs.
Bank of India
Bank of India is another established nationalized bank with a network of bank branches and ATMs all across the country. The savings account offered by the bank ranges from the Ordinary Savings Account (with an initial deposit of just 500/-) to the BOI Super Saving Plus account, which requires an average quarterly balance of 5 lakhs and an initial balance amount of 20 lakhs.
Bank of India also offers an attractive interest rate of 3.5% per annum on an average balance of less than 50 lakhs and 4% on accounts with an average balance of over 50 lakhs.
As the subsidiary of the Citigroup financial corporation, Citibank India has a branch network of 44 branches all across India along with around 700 ATMs in over 30 Indian cities. Due to the different banking needs of its customers, Citibank offers a variety of savings account including the Citibank Savings account (with facilities such as personal banker and lounge access), the Citi Priority Account (with the international Citi Priority World Debit card facility), and the Citibank Saving account for expatriates.
Citibank offers an interest rate of 4% per annum in all its savings accounts.
Bank of Maharashtra
Bank of Maharashtra is a major public sector bank in India. As a public sector bank, it has the largest network of branches in the state of Maharashtra. It offers various types of savings account like –
Post Office Savings Scheme
As an alternative to a banking savings account, customers can open a savings account in the post office nearest to their place of residence. A post office savings scheme is rated among the safest mode of investments in the country and is more accessible to people staying in rural and semi-urban areas of India with few banking options.
A post office savings account can be opened with an initial deposit of just 20/- with a maximum deposit amount of 1 lakh. A post office savings scheme has multiple features and benefits including no lock-in or maturity period, a minimum balance requirement of 50/- (for a general account) and 500/- (for an account with cheque book facility). Customers can also opt for the Post Office Monthly Income Scheme, which pays out an interest of 7.7% on their deposits.