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
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
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
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.