Banking · Savings

Savings Accounts

The default account for most Indians — but the difference between a 2.7% (large bank) and 7% (small finance bank) interest rate on a ₹5L balance is ₹21,500/year. Pick wisely. DICGC insures every depositor up to ₹5L, regardless of bank size.

Who needs this

Every Indian — 1 primary account is non-negotiable. Worth keeping a second high-interest savings account for parking idle balance.

Key decisions

  1. Q1

    Big bank or small finance bank?

    Big bank (HDFC/ICICI/SBI) for primary — wider ATM network, instant cards, branches everywhere. Small finance bank (AU/Equitas/Suryoday) for high-interest 7%+ savings — DICGC ₹5L still applies, fully safe.

  2. Q2

    Minimum balance — how much?

    Most metro accounts: ₹10K AMB (avg monthly balance). Salaried zero-balance variants exist. Penalty for non-maintenance: ₹150-600/quarter — kills you over years.

  3. Q3

    Sweep-in FD — worth it?

    Yes for balances ₹50K+. Idle balance auto-sweeps into 7-day FD, earns ~6.5% vs 2.7% savings. Fully liquid — sweeps back when you spend.

  4. Q4

    Section 80TTA — interest exemption?

    ₹10,000/year savings interest is tax-free under 80TTA (₹50,000 for 60+ under 80TTB). At 7% interest, that's ₹1.4L principal earning tax-free.

Top picks

Source: bank disclosures + RBI rate notifications · refreshed monthly

  • AU Small Finance Bank

    Highest interest tier — 7% on ₹1L+, monthly interest credit.

    7.25%

    p.a.

  • Equitas SFB Selfe

    Zero balance + 7% on balance ₹2L-25L.

    7.00%

    p.a.

  • RBL Bank Aspiration

    5% base + 6% on >₹1L. Strong urban network.

    6.00%

    p.a.

  • Kotak 811

    Digital-first, ₹0 minimum, full UPI.

    4.00%

    p.a.

  • ICICI / HDFC base savings

    Lowest interest but biggest network. Primary-account default.

    2.70%

    p.a.

RBI rules + scheme specifics

  • DICGC: deposits insured up to ₹5L per depositor per bank.
  • Section 80TTA: ₹10K interest exemption (₹50K under 80TTB for 60+).
  • AMB penalty: regulated (₹150-600/quarter typical) but compounding kills you.
  • RBI floor: 2.5% minimum savings interest rate.

Read these next

Calculators

FD vs SavingsInflation-adjusted returnsEmergency fund target
Back to →

All banking products

Recommended →

Fixed deposits — better rates than savings

No paid rankings
Methodology disclosed
SEBI-compliant
228+ researched articles