The highest interest rate on saving account offered by RBL Bank at 6% (upto 1 lakh) similarly, highest interest rate on saving account offered by Kotak Mahindra Bank and Yes Bank at 5%.
Disclaimer: The Fixed Deposit Interest Rates keep on changing. You are advised to check the interest rates with banks before making your FD. Source: Bank Websites
Top Reasons: Why Should you have a Savings Account?
Offers Interest on Deposited Funds
Savings accounts in India offer around 3.5% to 8% interest on deposited amount which is quite good return. It gives you proportionate interest which means even if you keep the money for a single day, you will get proportionate interest.
Keeping money at home or in office is very risky affair. Instead if you keep money in your savings account, it is very safe.
To Inculcate the Saving Habit
Having a savings account inculcates a saving habit in you. Whatever you save, you deposit in your savings account. When its balance amount increases, it encourages you to save more. After you save money in your savings account, it usually does not get waste i unnecessary expenses.
It provides highest liquidity. There is no lock-in period of funds. You are free to deposit or withdraw money any number of times. Whenever you require money you can withdraw it either from any branch of the bank or from any ATM.
Save for Emergency Fund Requirements
In case of emergency, it is the fist source which provides you instant money.
Obtain a Debit Card and a Cheque Book
If you open savings account, you will get a debit card and cheque book. You can use debit card either for withdrawal of cash or to make any third party payment or bill payment. Similarly, cheque book offers you a facility to either withdraw cash from your account or to make any third party payment or bill payment.
Perform Online Fund Transfer
You can perform online fund transfer using internet banking. You can do so using RTGS, NEFT or IMPS at very minimal charges. It saves your time and effort.
Pay the Bills Online
Through savings account, you can pay various bills like utility bill, credit card bill, etc. online. You can even give standing instructions to the bank to pay bills.
Use ECS Facility
You need to have a savings account in case you want to use ECS facility for different purposes like payment of Loan EMIs, Mutual Fund SIPs, etc.
Interest Income upto Rs 10,000 is Tax Free
Interest earned on savings account is tax free upto Rs 10,000 in each financial year. You can get its benefit by opening a savings account.
To Enjoy Locker Facility
You can enjoy locker facility of any bank, only when you have a savings account with that bank.
Many bank offer other benefits to their savings account holders such as free insurance, nil balance salary account, no annual fee for debit card, lower interest on home loan, etc.
Savings Account Highlights
- One of the the safest or smartest way to manage your savings.
- It provides liquidity of funds.
- Savings bank account is the most basic product of all the banks in India.
- It is usually a non zero-balance account means the account holder needs to maintain a minimum account balance of a certain amount.
- A penalty is levied upon the account holder for not maintaining the minimum balance as required by the bank.
- Generally opened by salaried individuals.
- It has daily withdrawal limits unlike current account where there is no such limit on withdrawal.
- Usually, it has low interest rate, it offers an interest rate which is little higher than the rate of inflation.
- It facilitates small savings with flexible amounts and tenures.
- It also offers the facility to the account holder to pay bills, make online fund transfer, make quick transactions, etc.