Ever since the Reserve Bank of India has moved its monetary policy to an inflation targeting system in 2016, the savings bank rate of interest has come down drastically and is the lowest in the history of Scheduled Commercial Banks in India.
It is usual to see that the larger banks in India offer the lowest rate of interest in India because of the reasons mentioned below:
- Larger banks are the ones that have the maximum deposit share in the banking system in India such as State Bank of India (SBI), HDFC Bank, and ICICI Bank. So these banks will have higher interest payments to their savings bank account customers. Even a 0.05% additional interest will cost these banks in crores, hence the rate of interest on savings bank account of larger banks is competitive, and the least.
- The huge network of larger banks and accessibility to their customers across all the corners of the country is an added benefit for the banks to get savings deposits at less rate of interest.
- Leverage of technology which includes access to savings bank account through multiple platforms such as internet banking, mobile applications, phone banking, Unified Payment Interface (UPI) and Automated Teller Machines (ATM), customers get attracted to these features even if the rate of interest is low for the savings bank account.
Coming to the rate of interest offered on the savings bank account by the major banks in India, here is the list based on which you can decide to keep your deposits:
|Bank||Rate of Interest per annum|
|State Bank of India (SBI)||2.70%|
|Bank of Baroda (BOB)||2.75% (<Rs.200 Crs) & 3.05% – 3.20% (≥Rs.200 Crs)|
|Bank of India (BOI)||2.90%|
|Canara Bank||2.90% (<Rs.100 Crs) & 3.00% – 3.20% (≥Rs.100 Crs)|
|HDFC Bank||3.00% (<Rs.50 lacs) & 3.50% (≥Rs.50 lacs)|
|ICICI||3.00% (<Rs.50 lacs) & 3.50% (≥Rs.50 lacs)|
|Punjab National Bank (PNB)||3.00% (<Rs.100 Crs) & 3.50% (≥Rs.100 Crs)|
|Axis Bank||3.00% (<Rs.50 lacs) & 3.50% (≥Rs.50 lacs)|
|Kotak Mahindra Bank||3.50% (<Rs.1 lac, >Rs.1 Cr) & 4.00% (Rs.1 lac – Rs.1 Cr)|
|IndusInd Bank||4.00% (<Rs.1 lac) & 5.00% – 6.00% (≥Rs.1 lac)|
Therefore, it can be concluded that the larger banks are the ones that offer the lowest rate of interest on savings account while being the larger banks are the ones that are easy to access across multiple platforms with a greater degree of safety as well. Following the recent issues pertaining to HDFC Bank which had faced frequent outages, it is always suggested to have a minimum of two savings bank account.