Savings Account – Features, Types, Fees & Charges, Interest Rates

A savings account is like a money safe at the bank. You put your money in there, and the bank gives you a little extra money over time, called interest. People like savings accounts because they're easy to use, safe, and reliable. You can put in as much money as you want, take it out whenever you need, and it's always there when you want to use it.

A savings account is like a safe spot for your extra money that you don't plan to spend often. When you keep your money there, the bank gives you some extra money over time, called interest. The interest amount is decided by the bank and can change sometimes. They pay you this extra money regularly, like every month, three months, or even once a year. The cool part is, if you need all your money, you can take it out right away and use it whenever you want.

A savings account is one of the easiest and most common banking tools for many people in India. Let's explore some key features of savings accounts:

1. Interest Earning: Account holders can earn interest on their savings account balance, typically ranging from 2% to 7%.

2. Senior Citizen Benefits: Senior citizens often enjoy an additional interest rate of 0.5% above the regular rates.

3. High Liquidity: Savings accounts provide high liquidity, allowing account holders to withdraw or transfer money as frequently as needed.

4. Debit/ATM Cards: Accountholders receive debit cards or ATM cards for making payments, conducting online transactions, or withdrawing cash from ATMs.

5. Convenient Fund Transfers: Fund transfers can be conveniently carried out using UPI, NEFT, IMPS, or RTGS through net banking, mobile banking, or by visiting the bank branch.

6. Multiple Operation Channels: Savings accounts can be operated through various channels such as net banking, mobile banking, phone banking, or SMS banking.

7. No Deposit Restrictions: Most accounts have no restrictions on the amount that can be deposited.

8. Deposit Security: Deposits up to Rs. 5 lakh are secured by DICGC, providing a safety net for accountholders.

9. Linking with Fixed Deposits: The savings account can be linked with fixed deposits, providing flexibility in managing funds.

10. Interest Payout Options: Accountholders can choose the frequency of interest payouts – monthly, quarterly, semi-annually, or annually.

11. Special Deals and Discounts: Special deals and discounts are often available for various savings accounts and debit cards.

12. Cheque Transactions: The option to deposit or issue cheques directly is provided through the savings account.

13. Monthly Average Balance (MAB) Requirements: Accountholders may need to adhere to Monthly Average Balance (MAB) requirements as specified by the bank.

Banks decide how much extra money they give you (interest) for keeping money in savings accounts, and they might change this from time to time. Usually, smaller banks that focus on serving specific needs offer the most interest. Here are the interest rates for savings accounts from some of the top banks in different groups.

Top Savings Accounts by Public Sector Banks
Bank Name Highest Interest Rate Amount Requirements
Bank of India 2.90% Above Rs. 1,00,000
Bank of Baroda 3.35% Rs. 1,000 crores and above
Central Bank of India 2.90% Up to Rs. 10,00,000
Canara Bank 3.55% For outstanding balance of Rs. 1,000 crore & above
Indian Bank 2.90% Rs. 200 crore and above
Punjab National Bank 2.75% Rs. 10 lakh and above
State Bank of India 2.70% Above Rs. 1,00,000
Top Savings Accounts by Private Sector Banks
Bank Name Highest Interest Rate Amount Requirements
Axis Bank 3.50% Rs. 50 lakh and up to less than Rs. 2,000 crore
HDFC Bank 3.50% Of and above Rs. 50 lakh
ICICI Bank 3.50% Rs. 50 lakh and above
IDFC First Bank 7.00% > Rs. 5 lakh <= Rs. 25 crore
IndusInd Bank 6.75% Daily balance above Rs. 25 lakh up to Rs. 5 crore
Kotak Mahindra Bank 4.00% Balance above Rs. 50 lakh and up to Rs. 100 crore
RBL Bank 7.50% Above Rs. 25 lakh and up to Rs. 2 crore
Top Savings Accounts by Payments Banks
Bank Name Highest Interest Rate Amount Requirements
Airtel Payments Bank 6.00% Balance of Rs. 1 lakh to Rs. 2 lakh
FINO Payments Bank 2.75% Balance up to Rs. 2 lakh
India Post Payments Bank 2.25% Balance above Rs. 1 lakh and up to Rs. 2 lakh
NSDL Payments Bank Up to 5% On account balance
Paytm Payments Bank 2.5% On account balance
Top Savings Accounts by Small Finance Banks
Bank Name Highest Interest Rate Amount Requirements
AU SFB 7.25% Balances from Rs. 1 crore to less than Rs. 5 crore
Equitas SFB 7.80% Above Rs. 50 crore
ESAF SFB 7.50% Above Rs. 50 lakh i.e for incremental amount above Rs. 50 lakh)
Jana SFB 7.55% More than Rs. 10 crore and up to Rs. 20 crore
Suryoday SFB 7.75% Above Rs. 5 crore up to & including Rs. 25 crore
Ujjivan SFB 7.50% Above Rs. 5 lakh
Utkarsh SFB 7.50% Incremental Balance above Rs. 10 crore

Banks have different types of savings accounts for different people. These accounts give special benefits to specific customers. Let's see what kinds of savings accounts there are and who should get them:

Regular Savings Account

A regular savings account is a basic type of savings account, and anyone can open it. If you keep money in this account, the bank gives you a little extra money called interest. Sometimes, the bank might charge a fee every year for taking care of your account. Usually, you need to keep a certain amount of money in the account every month. They only open these accounts after checking all your details through a process called KYC (Know Your Customer).

Salary Account

Salary accounts are made for people who receive their salaries every month. With these accounts, the bank offers special benefits like not needing to keep a minimum balance, giving a free chequebook and an international debit card, providing better interest rates on loans, and even including free personal accidental insurance coverage. It's like a special package for those who get a monthly paycheck.

Instant Digital Savings Account

You can open these digital savings accounts online in just a few minutes using online banking or a mobile app. But, if you don't finish all the required details (KYC) in a set time, the account is paused. Also, many of these quick digital savings accounts have a maximum limit of Rs. 1 Lakh for the total amount you can put in the account.

Zero Balance or Basic Savings Bank Deposit Account

These accounts don't require you to keep a minimum average monthly balance, and you can have them even if there's no money in the account. Since there's no need to keep a minimum balance, the bank puts some rules on these accounts, like limiting the number of times you can take money out from an ATM, the type of debit card you get, and not giving you a chequebook.

Women’s Savings Account

This special account is just for women, and they get extra benefits like a special debit card, not having to keep as much money in the account, and getting better deals on loans and credit. Some banks also give women discounts on lockers, let them take out cash from ATMs as much as they want, and even give them free chequebooks for different cities. It's like a special club for women at the bank.

Kids’ Savings Account

Parents or guardians can open these accounts for kids under 18 years old. The idea is to teach children about banking basics and help them learn good money habits early on. To open these accounts, parents or guardians just need to show their ID and make a formal statement. These kids' or junior savings accounts come with set limits on how much money can be deposited or spent, making sure everything stays under control.

Senior Citizens’ Savings Account

A senior citizen savings account is designed for people who are 60 years old or more. Those with this account get special benefits, like better interest rates when they put money in the account, paying less interest when they borrow money, and having a personal manager just for them.

Family Savings Account

A whole family can open different accounts using one family ID, and they can enjoy various banking services like savings accounts, fixed deposits, and recurring deposits. Family members covered by these accounts can include spouses, children, parents, grandchildren, grandparents, in-laws, and more. It's like having a bunch of different bank accounts, but all under one family umbrella.

To open a savings account, you need to meet certain requirements:

1. Resident Status: The person applying should be a resident of the country.

2. Foreigners Welcome: Some savings accounts allow foreigners living in the country to open accounts.

3. Age Criteria: Regular savings accounts usually require applicants to be at least 18 years old, while minors (those below 18) can open special accounts designed for kids.

4. PAN Card: Having a PAN card is a must for opening a savings account.

5. Aadhaar Linking: Linking the savings account with an Aadhaar card can make the account eligible for government subsidy benefits.

6. Photo or Video Verification: Depending on the account type, you might need to provide a photograph or go through a live video verification process.

7. Additional Documents: Other documents like a driving license, voter ID, ration card, etc., can be used to prove your identity and address.

With digitalization, banks have made it super easy for people to open a savings account. You can do it online or by going to the bank when it suits you. Whether you want a regular digital savings account or something special like an account for seniors, kids, or women, the process has become more convenient for everyone.

Steps to Apply for Savings Account Online

1. Go to the bank's website or download their mobile app.

2. Choose the type of account you want to open.

3. Fill in basic information like your name, date of birth, address, PAN, Aadhaar number, etc.

4. Verify your KYC (Know Your Customer) by providing necessary documents or through a video verification process.

5. Once your verification is successful, your savings account is ready to use.

Steps to Apply for Savings Account Offline

1.Visit the bank's branch.

2.Complete the savings account opening form.

3.Attach self-attested copies of your proof of address and identity.

4.Deposit the necessary amount based on the type of account.

5.After successful verification, your account will be opened and fully functional.

In India, banks can offer savings accounts to people according to the rules set by the Reserve Bank of India (RBI). Let's explore some of the leading banking institutions that provide savings accounts to customers.

Public Sector Banks

These are government-owned banks that serve over 50% of the market. The government has the major ownership in these banks. These banks focus on social welfare and provide services and products that are friendly to the public.

Private Sector Banks

Private sector banks are banks where most of the ownership is held by private shareholders like institutions, individuals, or groups. These banks have to follow all the rules laid out by the Reserve Bank of India (RBI).

Small Finance Banks

These banks offer basic banking services like taking deposits and giving loans, and they operate under a small finance bank license. They reach out to parts of the community that may not have access to big government or private banks, helping a lot more people be part of the financial system.

Payments Banks

These banks are created by the RBI, and they can only accept limited deposits, up to Rs. 2 lakh per customer. They are not permitted to give out loans or credit. However, people can still open savings or current accounts with these banks.

Regional Rural Banks

These are government-owned banks that are active in specific regions or states in India. They are part of the scheduled commercial banks and focus on providing basic banking services in rural areas.


  • You can deposit or take out money as many times as allowed by the account type.
  • You can transfer money online or offline.
  • You can withdraw money from ATMs across India.
  • Up to Rs. 5 lakh is insured by DICGC if the bank faces issues.
  • Additional insurance perks like personal accident cover, lost card protection, health insurance, etc., may be available.
  • Depending on your account and debit card, you might get special deals and discounts.
  • You can set up automatic instructions for bill payments.


  • The interest rate on the money you put in is usually lower.
  • You need to keep a minimum balance, which could earn more if invested elsewhere.
  • Not maintaining this minimum balance might lead to a penalty.
  • After using a certain number of free transactions, there's a fee for ATM withdrawals.

1. How can I check my savings account balance?

You can find out how much money is in your savings account in different ways: use net banking, mobile banking, UPI, get an account statement, use SMS banking, make a missed call, or visit the bank or an ATM.

2. Is saving account interest taxable?

Any interest you earn on your savings account balance up to Rs. 10,000 is tax-free under Section 80TTA. However, if you earn more interest, there might be Tax Deducted at Source (TDS) applied to the higher amounts.

3. Do I need to be over 18 years of age to open a savings account?

No, You can open a minor or kids savings account even if you're not 18 years old. However, for a regular, fully-functional savings account, you typically need to be over 18 years old.

4. Do all banks provide a cheque facility?

all banks provide a cheque facility. However, it's important to note that certain types of savings accounts, like BSBDA (Basic Savings Bank Deposit Account), instant accounts, digital accounts, etc., may not come with a cheque facility.

5. Are there charges for an ATM card linked to a savings account?

Yes, having an ATM/debit card usually comes with a yearly fee, which is around Rs.150 plus taxes (this can differ between banks). Some private banks might not charge this fee if you use your debit card to shop for a certain amount during the year, or if you keep a specific amount of money in your account regularly, as per the bank's rules.

6. Do I need to link the Aadhaar card with the savings account?

An Aadhaar card is a useful document that proves who you are and where you live, making it easy to open a bank account. If you want to get government subsidies and benefits like Direct Benefit Transfer (DBT), you'll need to give your Aadhaar card details to confirm your account and connect it with the scheme.

7. Can I open a savings account without a PAN card?

To open a savings account, the rules say you must give your PAN card details. If you don't have a PAN card, your application won't go through. But if you don't have a PAN, you can still apply by providing Form 60. This form explains why you don't have a PAN.

8. When would the account holder receive the account statement?

The bank will send your monthly account statement to the email address you've registered. If you want a physical (hard) copy, you can ask the bank for it, but there might be a small fee.

9. When is the interest credited in a savings account?

Interest is calculated at regular intervals, and the specific period is determined when you open the account. This could be monthly, quarterly, annually, or another specified timeframe.