What bank has highest interest rate on savings account

Savings Account Interest

Last Updated 06th Oct 2022

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Top Bank Interest Rates on Saving Account Comparison, Oct 2022

Savings Account Interest

A savings account opened at a bank is a basic type of account that allows you to deposit money and keep it safe while earning moderate interest on the balance maintained in the accounts. Different financial institutions provide varying rates of interest on a savings account. The rate of interest on savings accounts is further based on the minimum average balance maintained in the account. As per the current saving bank interest rates, Equitas Small Finance Bank, Jana Small Finance Bank provides the highest saving account rates of upto 7.25%.

Zero Balance Savings Account

Savings Account Interest Calculator

As per the RBI mandate, Interest is calculated on a daily basis on your closing balance of savings account. However, interest on savings account can be paid monthly, annually or quarterly. Banks use the following formula for calculating interest on savings accounts.

Interest = Amount (Daily balance)*(No of days)* Interest/Days in the year.

The example below explains the method to calculate interest on a savings account on a daily basis.

Illustration: Mr. A has ₹ 2,00,000 in his savings account from 1st June to 26th June of a year. On 26th June, he withdrew 1,80,000. What will be the total interest amount earned @ rate of 4% in the month calculated on a daily basis?

Interest for 26 days = 2,00,000 * 26 * (4/100)*365 = ₹ 569
Interest of 4 days = 20,000 * 4 * (4/100) * 365 = ₹ 8.76
Total interest earned during the month at the rate of 4% p.a. calculated on a daily basis is ₹ 577.76 (₹ 569 + ₹ 8.76)

Highest Banking Interest Rates

The table below mentions the highest interest savings account with the best bank for savings accounts.

How MyLoanCare Helps to Compare Savings Account Interest Rates

With MyLoanCare, you can easily compare savings account interest rates of top banks in one place without any hassle. It constantly researches the savings account offers of all key lenders in the market and feeds the detailed saving interest rate, minimum balance required, and other parameters. You can also easily find a detailed bank savings interest rate comparison of top banks and payment banks to choose the best savings account rate.

FAQs

✅Is savings account interest taxable?

Yes, savings account interest is taxable. Under section 80 TTA of the income tax act, savings account interest up to ₹ 10,000 accrued during a year is tax free.

✅How do interest rates on savings accounts work?

Interest rates on savings accounts are calculated on the average balances in the account on a daily basis. This interest is however paid monthly, annually or quarterly as per the policy of the bank. The interest on savings accounts may be affected if one does not maintain the minimum balance requirement of the bank.

✅Which bank has the best interest rate for savings?

Presently, Equitas Small Finance Bank, Jana Small Finance Bank provides interest rate upto 7.25% and thus has best interest rate for savings. Apart, some best zero balance savings accounts with the highest rate are 4.00%, 3.25%, 2.70%.

✅What is the average interest rate on a savings account?

Earlier interest rates on savings accounts were fixed at 4.00% per annum. However, the rates were deregulated by RBI in 2011, and now banks are allowed to fix their own savings interest rates. As a result of deregulation, the savings interest rates offered by banks in India today range from 0.50% to 7.25%.

✅Can DEMAT account be opened with savings account?

Yes, you can open a DEMAT account can along with a Savings account. DEMAT accounts are required to trade in various stock market instruments and they have different charges from the savings account.

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