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Would you earn any interest if you kept your cash in a safe deposit box? No! That's why you deposit your money in a savings account, where it can grow over time. Read this guide to know everything about savings accounts.
As the name suggests, Savings Account helps customers to save their money in banks and enjoy the dual benefit of liquidity and interest. This account is maintained by fixed-salaried persons or who have a fixed income. Basically, people park the amount of money into savings accounts that they are not willing to use as a daily requirement, and the best part of having a savings account is you can withdraw your amount anytime, which makes it completely liquid.
Previously, interest rates of the savings account were fixed at 3.5% per annum, but later in 2011, RBI deregulated the rates and now every bank can set their own interest rates. In India, it ranges from 3.5%-7%. To understand more about the savings account, read the below article-
Different terminologies have been used for this term, such as minimum balance, minimum daily balance, and minimum quarterly balance. It is the average balance that you should keep in your account for a specified period of time.
The easiest way to calculate Average Balance is adding up the everyday balance and dividing it by the number of days in a particular period. In case of non- maintaining minimum average balance you will have to pay the non-maintenance penalty. Every bank has its own policy for maintaining an average balance.
| Bank | Interest Rate | ||
|---|---|---|---|
| HDFC Bank | 3.5%(Up to 50 Lakh) | 4%(above 50 Lakh) | – |
| ICICI Bank | 3.5%(Up to 50 Lakh) | 4%(above 50 Lakh) | – |
| Yes Bank | 5%(Up to 1 Lakh) | 6%(1 lakh-1 Crore) | 6.5%(Above 1 Crore) |
| IndusInd Bank | 4%(Up to 10 Lakh) | 5%(10 Lakh-1 Crore) | 6%(Above 1 Crore) |
| Kotak Mahindra | 5%(up to Rs 1 Lakh) | 6%(above Rs 1 lakh) | – |
| Axis Bank | 3.5%(Up to 50 Lakhs) | 4%(above 50 Lakh) | – |
| IDFC Bank | 4% | – | – |
As per section 80TTA of the Income Tax Act,1961 interest earned on the savings account is exempt from being taxed if the interest earned amount is up to 10,000 rs. Interest earned on the savings account that is above 10,000 is liable to be taxed as per the income tax slab and will be mentioned under Income from other sources while filing Income Tax Return.
A zero-balance savings account is a type of savings account that doesn't require you to maintain a minimum balance to avoid charges. This means you can keep zero dollars in the account and still have access to features like a debit card and online banking, although some restrictions may apply.
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ICICI Bank offers a range of savings accounts with interest rates varying depending on the account type and your account balance. The interest rate can be anywhere between 3.00% and 3.50% per annum.
The interest rate on Axis Bank Savings Accounts can range between 3% and 4% depending on your daily maintained balance.
There is no minimum balance required to maintain an SBI savings account (except for a specific case).
