Saving account is a deposit account that provides principal security. Maintained by banks and financial institutions, a savings account usually pays interest on quarterly basis. So, earn monetary returns while saving a portion of your liquid assets.
What is a Savings Account?
Savings account is a kind of bank account that pays interest but cannot be directly used as a medium of exchange in the form of money. On the basis of the savings account’s types, an account holder might not be in a position to write checks without incurring additional fees. The number of free transactions or transfers across savings account is also limited.
The good thing is that savings bank account funds are considered as an essential form of liquid investment other than cash and demand drafts. Savings bank accounts are normally used for saving money that is not to be used for meeting daily expenses. For getting access to a saving account, you may access any local bank with appropriate identification documents and file a request for opening up an account.
Saving Account Interest Rates
The following table depicts a list of five banks providing the best saving account interest rates in India (last updated on 5th of May, 2016). The information has been collected from Bankbazaar.com.
|Savings Bank Account||Interest Rate Offered|
|RBL Bank||7.1% p.a on above Rs. 10,00,000 of daily balance
6.1% p.a on above Rs. 1,00,000 of daily balance
|Yes Bank||6% p.a on bank balances below Rs. 1 Crore|
|Kotak Mahindra Bank||6% p.a|
|Lakshmi Vilas Bank||5% p.a up to Rs. 5,00,000 of daily balance
6% p.a on above Rs. 5,00,000 of daily balance
|IndusInd Bank||4% p.a up to Rs. 1,00,000 of daily balance
5% p.a on above Rs. 1,00,000 but less than Rs. 10,00,000
6% p.a on above Rs. 10,00,000 of daily balance
4% p.a for non-resident NRO and NRE accounts
Got to Know the Account Types!
Now that you are really interested in setting aside a part of your liquid cash in a savings bank account, why not have an in-depth notion about their various types!
So here they are-
- Regular: This is a standard savings bank account that is available with basic terms and rates. However, maintaining a minimum balance amount is mandatory at all the times in a regular S/B A/C.
- Salary Based: This type of account is offered to the employees of recognized companies or institutions on pre-defined rates and terms. The account holders continue to enjoy benefits such as “zero balance” as long as the employer is crediting the salary.
- Account for Senior Citizens: Most Indian banks offer special privileges to senior citizens in the form of higher interest rates and other benefits.
- Account for children and minors: Aimed at encouraging the habits of savings in children, these accounts are maintained with the help of supervision by guardian or parents.
- Benefits account for women: Exclusively designed for women, these accounts are offered with special rates and features to womenfolk. At times, loans are also extended towards women entrepreneurs at varying rates of interest.
- Zero Balance Savings Accounts: These are special types of savings bank account offered to limited income group under various schemes of the Central and State Government.
Special Features of Savings Account
- A savings bank account is aimed at enhancing the habit of saving among individuals and institutions; thereby bringing in positive returns to the economy in the long run.
- A savings bank account holder gains access to negotiable instruments such as the demand drafts and cheques that can be used for making outward payments, sourcing funds for paying to the recipients, and so forth.
- By opening up a savings bank account, you can avail of the facility of making cash withdrawals and 24/7 online shopping facilities with the use of debit cards or ATM cards.
- S/B account holders may use internet banking and mobile apps for managing and executing their banking transactions virtually; without visiting the actual bank branches.
- For paying utility bills and others, you may avail the option of using Electronic Clearing Services (ECS) that debits the amount directly from your savings bank account.
Since a savings account generally pays lower rate of interest in comparison to treasury bills and CDs, it is not advisable to use the same for long term holding purposes. The greatest benefit of opening these accounts pertains to their liquidity and interest rates that are better than checking accounts.