If you want to be able to access your bank savings anytime, and can’t afford to dispense the savings for parking it in a fixed deposit (FD) account, the State Bank of India ((SBI) savings account or any other bank’s savings account seems to be a good alternative. However, your existing bank may not be offering a good return on the savings account. In such a case, it’s ideal to compare the interest rates of savings bank account of all major banks before you take a final call on the bank you choose. State Bank of India (SBI) offers interest rates which are 3.5 per cent for an amount less than Rs one crore. On the deposits above Rs one crore, the interest rate stands at 4 per cent. To make the most of the savings bank account, one can explore the option of opening an SBI savings plus account that enables the account holders to earn more interest on the unused account balance while offering the option to access the money as and when needed. In SBI savings plus account, the savings bank account is linked to the multi option deposit (MOD) account. The surplus fund above the threshold limit from the savings bank account is transferred to term deposits opened in multiples of 1,000.
State Bank of India (SBI)
| SAVINGS ACCOUNT BALANCE | INTEREST RATES |
|---|---|
| Saving Deposits Balance upto Rs. 1 crore. | 3.50% p.a |
| Saving Deposits Balance above Rs. 1 crore. | 4.00% p.a |
ICICI Bank
| SAVINGS ACCOUNT BALANCE | INTEREST RATES |
|---|---|
| Below Rs 50 lakh (end of day bal) | 3.5% |
| Above Rs 50 lakh | 4% |
Just as State Bank of India (SBI), the interest rates on the savings account stand at 3.5 per cent and 4 per cent. However, the threshold of higher rate of interest is Rs 50 lakh instead of Rs one crore in case of SBI.
ICICI Bank website also highlights that the interest amount calculated is rounded off to the nearest rupee. Also, interest will be paid quarterly in March, June, September and December with effect from March 30, 2016. ICICI Bank calculates interest on a daily basis on the daily closing balance in the savings bank account.
HDFC Bank
| SAVINGS ACCOUNT BALANCE | INTEREST RATES |
|---|---|
| Rs. 50 lakh and above | 4% |
| Below Rs 50 lakh | 3.50% |
The interest rate offered by HDFC Bank is a mere 4 per cent when the amount of savings bank account is Rs 50 lakh and above. The interest rate offered by the HDFC Bank stands at 3.5 per cent when the amount is below Rs 50 lakh.
Bank of Baroda
| SAVINGS ACCOUNT BALANCE | INTEREST RATES |
|---|---|
| Balance upto Rs. 50 Lakh | 3.50% |
| Saving Deposits Balance above Rs. 50 Lakh | 4.00% |
The interest rate offered by Bank of Baroda is a mere 3.5 per cent when the amount of deposits is in within the range of Rs 50 lakh. At the same time, the interest rate rises to 4 percent when the amount of deposits rises past Rs 50 lakh.
Yes Bank
| SAVINGS ACCOUNT BALANCE | INTEREST RATES |
|---|---|
| Less than Rs 1 lakh | 5% |
| Between Rs one lakh and Rs one crore | 6% |
| Above Rs one crore | 6.25% |
The interest rates offered by Yes Bank are most alluring. The savings account balance, when less than Rs one lakh, fetches an interest rate of 5 percent, a good 150 basis points higher than the SBI’s account balance. The savings account balance, when between Rs one lakh and Rs one crore, offers an interest rate of 6 per cent, which is mere 65 basis points less than what SBI offers on its one-year term deposits.
For the account balance above Rs one crore, the interest rate is as high as 6.25 percent.
As a matter of fact the differential in the rates of interest between term deposits and savings account is usually large. For instance, SBI pays 6.65 percent on its one year term deposits while it offers only 3.5 per cent on the deposits to the tune of less than Rs one crore.
In such a scenario, the interest rates on the savings bank account of one bank (Yes Bank), being closer to the fixed deposit interest rates of another bank (SBI), is quite significant and noteworthy.
It is noteworthy that the SBI offers interest rates on its fixed deposits (FDs) at these rates. SBI revised its latest FD interest rates on May 28, 2018. The interest rates offered by post offices can be accessed here. At the same time, the interest rates of small finance banks are significantly higher and can go as high as 9 per cent per annum.
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