Banks vs. Post Office: Savings Account Interest Rate Comparison

Top 5 public sector banks offering the highest interest rates on savings accounts

Here are the top 5 public sector banks currently offering the highest interest rates on savings accounts, according to our research.

Banks Interest rate per year Wef
UCO Bank 3.50% to 4.00% 25.08.2017
Bank of Punjab and Sindh 3.00% to 3.20% February 01, 2022
Canara Bank 2.90% to 3.20% 28.09.2020
National Bank of Punjab 2.75% to 3.25% February 3, 2022
Bank of Baroda 2.75% to 3.20% 07/19/2021
Source: Bank websites
Top 5 Private Sector Banks Offering the Highest Interest Rates on Savings Accounts

Top 5 Private Sector Banks Offering the Highest Interest Rates on Savings Accounts

According to our analysis, here are the top 5 private sector banks currently offering the highest interest rates on savings accounts.

Banks Interest rate per year Wef
RBL Bank 4.25% to 6.25% February 03, 2022
First IDFC Bank 4.00% to 5.00% 05/01/2021
IndusInd Bank 4.00% to 5.00% July 23, 2021
Kotak Mahindra Bank 3.50% Sep 20, 2021
Bandhan Bank 3.00% to 6.00% November 1, 2021
Source: Bank websites
Top 5 Small Financial Banks Offering the Highest Interest Rates on Savings Accounts

Top 5 Small Financial Banks Offering the Highest Interest Rates on Savings Accounts

According to our analysis, here are the top 5 small financial banks that now offer the highest interest rates on savings accounts.

Banks Interest rate per year Wef
Ujjivan Small Finance Bank 4.00% to 7.00% March 6, 2021
Small Corporate Bank ESAF 4.00% to 6.50% August 01, 2020
Northeast Small Finance Bank 4.00% to 6.00% January 27, 2022
Suryoday Small Finance Bank 4.00% to 6.25% January 20, 2022
Utkarsh Small Finance Bank 3.75% to 7.00% October 1, 2021
Source: Bank websites
postal savings account

postal savings account

The Post Office Savings Account (POSA) is offered by the Post Office Department and requires a minimum deposit of Rs 500 to set up. Individually, jointly or on behalf of a minor, an account can be created. Currently, POSA offers an annual interest rate of 4%, calculated on the basis of a minimum balance. Interest earned on all savings bank accounts up to Rs. 10,000 in a financial year is exempt from taxable income under Section 80TTA of the Income Tax Act.

If no deposits or withdrawals are made to an account for three consecutive years, the account is considered silent/dormant. The account allows a minimum withdrawal of Rs 50, after which no withdrawals would be allowed, lowering the minimum balance to Rs 500. If the account balance does not exceed Rs. 500 before the end of the financial year, a fee of Rs. 100 will be deducted as an account maintenance fee, and if the account balance drops to zero, the account will be permanently closed.

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