Want to invest a savings account with high interest rates? Try these banks
New Delhi: Savings bank accounts generally carry lower interest rates than term deposits. Compared to large private banks, there are a few small and new private banks that offer better interest on savings accounts. It is strongly recommended to review the amount of interest that banks pay to hold deposits in the savings account.
Major public and private sector banks now offer an interest rate of between 2.5% and 5.5% on their fixed deposits to the general public, depending on the term of the deposit. For seniors, they offer up to 6% interest on FDs.
But some of the smaller private sector banks and smaller corporate banks still offer between 3% and 7.25% on their savings bank accounts provided a specific amount of average balance is maintained in the account. Thus, savers have the opportunity to earn higher interest by parking their money in a savings bank account rather than locking their money in FDs.
Some smaller finance banks also offer high rates. For example, AU Small Finance Bank, Equitas Small Finance Bank and Ujjivan Small Finance Bank offer interest rates of up to 7%. The interest rates offered by small financial banks on savings account are higher than those of major private sector banks and large public banks.
Also, it should be mentioned here that the amount of interest earned on time deposits and savings account is taxable according to the depositor’s tax plate. However, in accordance with Section 80TTA, a deduction of Rs 10,000 is offered on interest income from a savings account. Thus, the amount deposited in a savings account at a small savings bank or a small private sector bank can potentially earn higher after-tax interest than the fixed deposit in a larger PSU and bank in the private sector.
If you’re considering putting some of your savings into high-yield savings accounts, here are some options for you.
Nowadays, RBL Bank, Bandhan Bank and Yes Bank are among the top 3 banks that offer the highest interest rate on savings accounts to their customers.
RBL Bank
RBL Bank offers its customers the highest interest on savings accounts. According to the official website of RBL Bank – rblbank.com – the private lender offers its customers an interest rate on the savings account from 4.5% to 6.25%.
Bandhan Bank
Bandhan Bank offers an interest rate on the savings account of 3% to 6%, depending on the daily balance.
Yes Bank
According to the bank’s website – yesbank.in, the private lender offers a savings account interest rate of 4% to 5.5%.
It is therefore up to bank depositors to decide whether they want a quick appreciation of their money or simply remain relaxed when it comes to their savings account returns.
