Here Are Public Sector Banks That Offer The Best Interest Rates On Savings Accounts
Punjab & Sind Bank and IDBI Bank offer the highest savings bank interest rates among public sector banks. SBI offers lower rates
Oct 23, 2020 / 11:11 AM IST
Savings bank accounts generally carry lower interest rates compared to those on fixed deposits. And public sector banks offer much lower rates than what many new private and small finance banks do. You can use the savings account for parking your emergency corpus if you find even liquid funds risky for your appetite. Even so, it’s important to give some serious thought to know how much interest is paid by banks for leaving your funds in the savings account.
Interest rates are comparable to leading private banks
As per data compiled by BankBazaar, public sector banks such as Punjab & Sind Bank and IDBI Bank offer interest rates of up to 3.5 per cent on their savings account. These interest rates are competitive when compared with what leading private banks offer. For instance, HDFC Bank and ICICI Bank offer 3 per cent to 3.5 per cent interest.
However, large public sector banks give far lower interest rates to their savings account holders. For instance, State Bank of India and Bank of Baroda pay just 2.70 per cent and 2.75 per cent, respectively.
Minimum balance requirements are lower
The minimum balance requirement in savings accounts of public sector banks starts from Rs 250 and at the State Bank of India, it’s nil. This is kept much lower compared to the requirements of leading private banks in India because public sector banks are backed by the Government of India and they are more interested in reaching out to the lower and middle classes with their services. For Axis Bank and HDFC Bank, the minimum balance requirement is Rs 2,500 to Rs 10,000. In the case of ICICI Bank, the minimum balance requirement is Rs 1,000 to Rs 10,000.
Choose a bank with a long-term track record, good service standards, wide branch network and ATM services across cities; a higher interest on savings accounts would be a bonus.
A note about the table
Interest rate on savings accounts for all BSE-listed public sector banks and private banks are considered for data compilation. Banks whose websites don't advertise the data are not considered. Minimum balance requirement for regular savings account and excluding BSBD account.