Keep a part of your surplus income in savings accounts for liquidity and emergencies during uncertain times. Amid falling interest rates, small finance and payment banks offer higher interest rates.
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Small finance and payment banks have low cost, high tech-enabled business models, because of which they can offer better value to the customers. The interest rates on savings accounts offered are higher over the mainstream banks. These banks offer a suite of financial products to serve customers all financial needs, including saving, investing, borrowing, and insurance requirements.
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You should 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.
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Equitas Small Finance Bank and Fincare Small Finance Bank offer interest rates up to 7 percent on savings accounts. Among small finance banks, this bank offers the best interest rates.
ESAF Small Finance Bank offers 6.5 percent interest if the customer maintains balance above Rs 1 lakh in their savings account. The bank offers 4 percent interest for balances upto Rs 1 lakh.
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Suryoday Small Finance Bank is offering interest rates up to 6.25 percent on savings accounts. The average monthly balance requirement is Rs 2,000.
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Airtel Payments Bank offers up to 6 percent interest to savings account customers. Among payment banks, this bank offers the best interest rates. The Reserve Bank of India (RBI) has recently categorised this bank as a scheduled bank. North East Small Finance Bank also offers up to 6 percent interest to savings account customers.
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We compiled the interest rate on savings accounts for small finance banks and payments bank from bank websites. The minimum balance requirement for the regular savings account and excluding a basic savings bank deposit (BSBD) account is considered.
Hiral Thanawala is a personal finance journalist with 9 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
