Best Online Savings Account Interest Rates Comparison Guide

08 Jan 2021 // 56 min read // #mmm news
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A Savings Account is the first point of contact with a bank in any person’s life. For, it offers capital security, liquidity & interest income all at the same time. Besides, add-on services such as internet, mobile & SMS banking, money transfer, ATM & many services make bank account a must-have for all. With the help of a Savings Account you can access many other bank services such as a Debit Card, Credit Card, RD, FD, DEMAT Account etc.

Types of Saving Accounts

Salary Account: A Saving Account where the monthly salary of a salaried individual is credited is called a Salary Account. The account is facilitated with all benefits of Savings Account and usually has no obligation to maintain a Minimum Account Balance (MAB).

Zero Balance Accounts: These are basic Savings Accounts with no MAB requirement. However there are limited benefits such as a capping on the number of monthly transactions.

Furthermore banks offer different Savings Accounts to cater to diversified customer base. Some of the popular Savings Accounts with most banks are Premium Savings Account for HNIs, Women’s Account, Senior Citizen’s Account, and Minor Account. The minimum account balance limit and monthly transaction size & number will be different for each product.

Earlier to open a Savings Account, customers were required to fill a form and submit at the bank branch. Not any longer. You can open an Instant Savings Account Online using your Aadhar and PAN details. The process is contactless and paperless. Using Video KYC the account becomes operational instantly.

Online Saving Account Interest Rate Comparison

BankOnline Saving AccountInterest RateFeatures & benefits

Bandhan Bank

Neo+ Savings Account

Up to Rs. 1 Lakh: 3%

Rs. 1 Lakh to Rs. 10 crore: 6%

Rs. 10 crore to Rs. 50 crore: 6.55%

Above Rs. 50 crores: 7.15%

  • MAB: Rs 5000
  • 5 min paperless account activation process
  • Free Visa Debit Card
  • 24X7 online fund transfer
  • Instant utility bill transfer

HDFC Bank

InstaAccount

Rs. 50 lakh & above: 3.50%

Below Rs 50 lakh:  3.00%

  • MAB as per the variant chosen
  • 2 minute account opening
  • Net & Mobile Banking
  • Utility bill payments
  • Access ATM for withdrawal
  • Fixed Deposit can be opened using HDFC InstaAccount

State Bank of India (SBI)

Instant Bank Account

2.70%

  • MAB: No Limit. Zero balance account
  • Account can be opened using YONO app
  • Max of Rs 1 lakh can be deposited in limited KYC online account
  • Complimentary Rupay Debit Card
  • Nominee facility
  • Mobile banking using YONO app

Kotak Bank

811 & 811 Edge

4%

  • MAB for 811: Nil
  • MAB for 811 Edge: Rs 10000
  • Get Debit Card
  • Chequebook on demand

DBS

Digibank Savings Account

4%

  • MAB: Rs 5000
  • Instant account opening through digibank mobile app
  • Free UPI, IMPS, NEFT and RTGS
  • Debit card
  • Invest & borrow online

Axis Bank

Digital Savings Account

3% for less than Rs 50 Lakh

  • MAB as per variant chosen, starting from Rs 15000
  • Paperless application
  • Transact securely via Debit card, UPI, NEFT, IMPS and RTGS
  • E- Debit Card loaded with multiple offers
  • Physical debit card after account activation
  • Option for Signature Update via Axis Mobile app

IDFC First Bank

Savings Account

Less than, equal to 1 Cr: 7.00%

More than 1 Cr and up to 5 Cr : 5.00%

More than 5 Cr and up to 10 Cr: 4.00%

More than 10 Cr: 3.50%

*Interest is calculated on progressive balances in each slab

  • MAB varies as per variant
  • Free visa debit card
  • Multiple fund transfer
  • Open instantly using Aadhaar & PAN

ICICI Bank

Insta Save Account

Below Rs 50 Lakhs: 3.00%

Above Rs 50 Lakhs: 3.50%

  • Instant account opening
  • No balance  commitment on Fixed Deposit
  • Special Offers
  • Visa debit card
  • Complimentary Platinum Chip Credit Card with limit of up to 90% of FD

IndusInd Bank

Online Savings Account

Up to Rs 1 Lakh: 4%

Rs 1 Lakh to Rs 10 Lakh: 5%

Above Rs10 Lakh: 6%

  • Zero balance account, privilege variants also available
  • Limited KYC account
  • Aggregate credits up to Rs. 2 Lakh per annum
  • Balance should be up to 1 Lakh
  • Platinum Plus Debit Card
  • Enjoy cashback, BMS, dining & many more offers
  • Complimentary Insurance cover

Yes Bank

Digital Savings Account

Up to Rs 1 lakh: 4%

Rs 1 lakh to 10 lakhs: 4.75%

Rs 10 lakhs to 100 Crore: 5.5%

  • Instant digital savings account
  • MAB for limited KYC Account is NIL
  • 24X7 online fund transfer through RTGS, NEFT, IMPS & UPI
  • Virtual debit card
  • Titanium Debit Card on request
  • Unlimited ATM transactions
  • Anywhere banking facility at Yes branches
  • Cumulative Transaction up to Rs 2 Lakh in FY

Features and Benefits of Savings Accounts

In all, a Savings Account is a must have in this digital age. Right from paying utility bills digitally, shopping online, to withdrawing cash from ATM, to internet banking, mobile banking, and loading balance into a digital wallet, to opening up a fixed deposit, every transaction requires a Savings Bank Account. Let’s take a quick sneak peek on features and benefits of Saving Benefits.

A secure reservoir for your cash: A Savings Account acts as a secure reservoir of your cash. You can deposit your income and enjoy ease of making payments and receiving funds while adding a fixed interest rate to the principal amount. You enjoy complete liquidity and security by depositing your cash in a Savings Account.

Interest Rate: The amount you park in a Savings Account earns an interest rate at a regular interval. Presently bank deposit accounts yield interest ranging from 3 to 7 per cent. Each bank revises the rate of interest as per its liquidity needs and repo rate & reverse repo rates as announced by the central bank. Also note that, annual interest income over Rs 10000 from bank accounts is subjected to be taxed as per your tax slab.

Capping of Minimum Average Balance: Each Savings Account has a predefined clause pertaining to minimum average balance (MAB). Failing to maintain the MAB, a charge is levied. The capping varies across the banks and types of Savings Account. Thus you should always enquire about MAB before opening a bank account.

Passbook and Cheque Facility: With your Savings Account, you get access to the history of debit and credit transactions as a passbook. You can access bank account’s passbook online or offline as per your choice. Furthermore, you get cheque book to transact payments or withdraw cash from the bank. The bank mails a physical passbook and cheque book at your doorstep. The facility is complimentary or has a nominal fee as per the bank & account variant.

Ownership of the account: A savings account can be held individually or jointly. Further you can link your savings account to open minor savings account for your kids. All the account holders need to fulfil the KYC procedures. A minor above 10 is allowed to open a savings account independently. You are allowed to add a nominee to your account.

Ease of Transactions: One of the major advantages of a Savings Account is the facility of hassle free fund transfers and receipts. You can do so in multiple ways using NetBanking, bank’s app, Debit Card, chequebook etc.

Payment of Bills: Another benefit is ease of paying out recurring bills by automating the payments such as utility bill payments, credit call bills, loan EMIs etc.

ATM: The ATMs across the city allow you to use your Debit Card on the run and withdraw cash as per need. The money can be withdrawn from your bank’s ATM or other bank ATM.

Net Banking & Mobile Banking: Your bank provides an online login ID to access net banking & mobile banking which has your Savings Account personal details, account balance, linked Credit Cards, Debit Cards, FDs etc, monthly statements, etc and thus makes it extremely hassle free to manage your savings. You can send and receive payments online conveniently. You can also use mobile & internet banking for customer support and bank queries.

Debit Card: Most Savings Accounts offer you complimentary Debit Card. Sometimes you are required to pay a nominal annual charge for having a debit card. The card serves as an ATM Card and also helps you instantly pay at POS terminals.

Pre approval for other bank products: A bank’s Savings Account holders become preapproved for several other bank products. As bank already has your KYC details, the bank can offer your loan, insurance and investment offers. Example-the Bank may waive off processing fee, first-year maintenance fee for its customers opting for other bank products.

Contactless Emergency Loan with instant approval

Difference between Savings Account and Current Account

While Individuals open Savings Account to deposit their cash earnings and earn interest income on the same, a Current Account is opened by businesses for their daily transactions. However the latter does not earn any interest income.

Current Accounts offer absolute liquidity and ease of transacting along with an overdraft facility. However the Minimum Account Balance requirement is higher than a regular Savings Account. It is thus important to have a separate Savings Account and Current Account. Like Savings Account, your Debit Cards and Credit Cards should be distinct for personal and business needs.

Eligibility Requirements for Opening a Savings Account Online

Amid COVID Times, most banks have updated their systems and enabled processes to open instant Savings Accounts digitally. The customers can complete video KYC online and instantly get access to a Savings Account. They can access the account via bank app or through interest banking. However, the account is opened as a limited KYC account which is converted to a regular account or a full KYC account after you visit a bank’s branch and complete the full KYC process. A limited KYC account often has a transaction and balance limit attached. The terms and conditions vary as per bank.

The eligibility requirements are easy to meet. You require following to open an online savings account:

1. Should be an Indian resident
2. Must have Aadhaar  Card
3. Pan Card
4. A smart phone or a computer with internet connection
5. GPS & camera needs to be allowed to link with bank for completing KYC process.

How to Open a New Savings Account Online?    

As you sit with your mobile number, Aadhaar number and a PAN number, you can open an Instant Savings Account from place of your choice. Let’s walk you through the easy steps to open a Savings Account contactlessly.

1. Visit the official website of the bank.
2. Click on ‘Open a Savings Account.’
3. Accept request to access location and share consent for camera access.
4. Enter your details: Name, mobile number, Aadhaar & PAN
5. Validate the step by filling in OTP received.
6. Complete account preference.
7. Submit the form

Depending on bank’s interface, you will receive account number and Customer ID within a few minutes. You can access the account instantly.

Documents Required for Online Savings Account

When you open online Savings Account, you do not require an elaborated list of documents.

You will only require:

1. Aadhar Card

2. Pan Card

Within 1 year you are required to visit the physical branch and convert the limited KYC account in to a full KYC account.

FAQs

✅ What is Monthly Average Balance?

A Monthly Average Balance or MAB is the minimum average monthly balance requirement for a bank account. If you fail to maintain the same, it will attract a charge.

✅ How many Savings Bank Deposit Accounts I can have?

You can have multiple savings accounts with different banks. It is recommended to have a maximum of 3-4 accounts or it may get extremely difficult to manage or reports.

According to Deposit Insurance and Credit Guarantee Corporation (DICGC) each depositor in a bank is insured for up to a maximum of Rs 5 Lakh by the institution. So if you have 3 bank accounts, Rs 5 Lakh each from the all 3 banks will be protected, in case the bank goes under.

Note that you can have a single account with the same bank. Also to open an online account you should not have any existing account with the bank.

✅ What all services can I access with net banking?

You can access almost all services available with bank via net banking. Common ones include: checking account balance, account details, payment instructions, money transfer facility, account statement, open/ check linked FD, Credit Card, Loan & other accounts and many more.

✅ Is Interest income of a Savings Account taxable?

Annual Interest income up to Rs 10,000 from bank accounts is tax free under Section 80TTA.

✅ How the interest rates on Savings Accounts are calculated?

The interest on Savings Accounts is calculated on the average balance maintained in the account on a daily basis. This interest is accrued monthly, quarterly or bi annually as per the bank’s policy.

✅ Presently which bank offers the best interest rate for savings accounts?

Jana Small Finance Bank offers interest rate up to 7.50% on Savings Account and it is the best interest rate for the bank deposit balance currently.

✅ Which bank is safe for Savings Account holders?

Indian banking system is quite robust and thus your amount in any of the commercial banks is absolutely safe. You should choose the bank as per your needs. Top banks in India are: SBI, HDFC, ICICI, PNB, Axis, Kotak, Bandhan Bank, DBS, Yes Bank, IDFC first, and IndusInd.

Also Read: 10 Best NRE Savings Accounts for NRIs

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