Saving money is the first step towards a secure financial future. In early days, people used to keep their savings in trunks, potlis and hidden lockers in their houses only which was always susceptible to theft, loss or damage. Now, people use savings accounts for the very same purpose, with an added advantage of early interest on the same.
In this blog, we will provide you with a comprehensive guide to savings accounts, from savings account meaning and how they work to the best savings account interest rates and more. We will also cover the best zero balance savings accounts, their interest rates, and the difference between current account and savings account.
What is a Savings Account?
A savings account is a type of bank account that is designed to help you save money while earning interest on your savings.
When you open a savings account, you deposit money into the account, and the bank pays you interest on the balance. A savings bank account interest rate is usually lower than other types of deposits, such as a fixed deposit account ranging from 3% – 4%. But with it, your liquidity is not compromised.
Most of the savings accounts come with additional features, such as internet banking, mobile banking, ATM access, and various fund transfer options like NEFT, RTGS, IMPS and UPI, which make it easy to manage your money and monitor your savings. With savings accounts, you get complementary debit cards as well, on which you may earn reward points, airport lounge access, cashbacks and much more.
Benefits & Features of Savings Account
Below-mentioned are the features of a savings account in India:
- Interest rates ranging from 2.75% to 8% (may change from time to time)
- Interest offered basis the balance
- Valid PAN Card mandatory for opening a savings account in India
- Mostly interest credited annually (banks like IDFC First offer monthly credit)
- Necessary for buying any financial product
- Minimum balance required (except for zero balance accounts)
Apart from the features stated above, there are many benefits of opening a savings account in India, viz.:
- Inculcates the habit of savings
- Special savings accounts for kids to encourage savings and train for financial responsibility
- ATM facility – for withdrawals, balance enquiry, debit card PIN generation, etc.
- Complementary debit cards offered basis eligibility
- Netbanking and mobile banking facilities provided
Best Savings Account Interest Rates 2023, India
Below-mentioned are the top interest paying savings accounts in India in 2023:
Top Savings Accounts by Commercial Public Sector Banks in India, 2023
|State Bank of India (SBI)
|Up to 3.00%
|Bank of Baroda
|Up to 3.35%
|Punjab National Bank (PNB)
|Up to 3.00%
|Up to 4.00%
|Up to 2.90%
Top Savings Accounts by Commercial Private Sector Banks in India, 2023
|Up to 3.00%
|Up to 3.50%
|Up to 3.50%
|Kotak Mahindra Bank
|Up to 3.50%
|Up to 6.25%
|IDFC First Bank
|Up to 6.75%
|Up to 7.00%
Best Savings Accounts by Small Finance Banks in India, 2023
|AU Small Finance Bank
|Up to 7.25%
|Jana Small Finance Bank
|Up to 7.50%
|Suryodaya Small Finance Bank
|Up to 7.00%
|ESAF Small Finance Bank
|Up to 6.50%
|Ujjivan Small Finance Bank
|Up to 8.45%
|Utkarsh Small Finance Bank
|Up to 7.50%
|Equitas Small Finance Bank
|Up to 7.00%
Disclaimer: The above-mentioned interest rates are subject to change. For the latest savings account interest rates, please check your bank’s website.
How to Open a Savings Account?
A savings bank account can be opened easily with very few steps. You will need minimal documentation and will be offered a complementary debit card in most of the cases. To open a savings account, simply visit the bank of your choice with the following list of documents:
Documents Required to Open a Savings Account in India:
- PAN Card
- Aadhaar Card* (optional, if you wish to avail government subsidies and schemes)
- Filled and signed KYC Form
- Passport-sized photograph(s)
*Make sure your Aadhaar Card is linked with PAN Card.
As you present these documents to the bank, an official will verify these documents after which, your account will be opened. Collect your bank account details, complementary passbook, cheque book, debit card and internet banking kit before leaving the branch.
The steps are similar for opening a savings bank account online. The only difference is that instead of going to the branch, you simply visit the official website of the bank and furnish documents and complete verification over virtual call. Please note that to open a savings account online, Aadhaar card is required, along with PAN Card. Also, such accounts are called digital savings account.
Types of Savings Bank Accounts in India
There are different types of savings accounts in India, some of which are mentioned below:
Regular Savings Account
This is a simple savings bank account with minimum average balance requirement (monthly) and can be opened by individuals, HUFs, etc. These accounts are to be opened at the branch with complete KYC.
Zero Balance Savings Account
This is one of the most popular and sough for savings accounts in India. As the name indicates, there is no need to maintain minimum balance in such accounts. Its suitable for students, homemakers, those with small or unstable earnings and so on. Check the best zero balance savings accounts.
Digital Savings Account
A recent addition to the savings bank accounts, a digital savings account, as the name suggests, can be opened instantly using either the online banking or mobile banking modes. These accounts require the customer to submit their PAN and Aadhaar cards and complete verification over video calling. Some of the banks offering such account include Kotak 811 Savings Account by Kotak Mahindra Bank, Insta Savings Account by State Bank of India, Digital Savings Account by Standard Chartered Bank and DigiBank by DBS Bank etc.
Salary Savings Account
A salary savings account is opened specifically by/for the salaried employees, in either private or public enterprise. These accounts
Premium Savings Account
Senior Citizens Savings Account
This is a type of savings account for retired individuals or those of 60 years of age or more. Some of the best savings accounts for retirement are given here:
- Indian Bank savings account for pensioners
- ICICI Bank Seniors Club Savings Account
- Bank of Baroda Pensioners Savings Account
- HDFC Bank Pension Savings Account
- Kotak Mahindra Grand Savings Account for Senior Citizens
- Canara Bank Jeevandhara SB account for Senior Citizens
- IndusInd Bank Senior Citizens Savings Account
- Axis Bank Senior Privilege Savings Account
Savings Account for Kids
Children under the parental or legal guardianship, between the age of 10 years and 18 years, can open a savings bank account in most of the banks in India. The basic idea of such accounts is to inculcate and encourage the habit of savings from an early age. A debit card is usually offered with these accounts with limited withdrawal facility. Also, mostly these banks may require maintaining a minimum balance but no charges are levied on non-maintenance of the same. Below-mentioned are some of the savings account for kids offered by top banks in India in 2023:
- SBI Savings Account for Minor
- HDFC Kids Savings Account and super Kids Savings Account
- Bank of Baroda Savings Account for Minor (Baroda Champ Account)
- PNB Junior SF Account for Minor
- ICICI Young Stars Account I ICICI Smart Stars Account for Minor
- Axis Bank Future Star Savings Account for Kids
- Kotak Junior Savings Account
Zero Balance Savings Accounts by Top Banks in India, 2023
Here, we have provided the top zero balance savings accounts in India provided by the public as well as private banks:
Zero Balance Savings Accounts in Commercial Banks, 2023
SBI Zero Balance Savings Account
SBI, country’s largest and most trusted commercial bank, has many options and is definitely one of the best banks for savings account. SBI Basic Savings Bank Deposit Account is the bank’s zero balance account with the following features:
- No minimum balance or upper balance limit
- Withdrawals only at ATMs or at the branch
- SBI Debit card issued: Basic Rupay ATM-cum-debit card
- Cheque book facility is not provided
- Interest up to 2.70% per annum
HDFC Zero Balance Savings Account
Below-mentioned are the basic features and benefits of the HDFC Basic Savings Bank Deposit Account:
- Interest rate 3% p.a. for balance up to Rs 50 lakhs (above this, 3.50% interest p.a.)
- Complementary RuPay debit card
- 4 free cash withdrawals at branch/month
- Safe deposit locker facility
- Free passbook facility
- Free 25 cheque leaves per financial year
- Additional cheque-book of 25 leaves @ Rs 100/- (Rs.75 for senior citizen)
- Free e-mail statements per month
- Option to stop cheque payments via SMS
Bank of Baroda Zero Balance Savings Account
BOB, one of the largest public sector commercial banks in India, offers its customers the option of maintaining zero balance or no balance with their Baroda Pensioners Savings Bank Account. These are the features & benefits of this account:
- Interest rate of 2.75% p.a.
- Account opening with minimum of Rs 5 only
- Overdraft facility
- Free unlimited cheque books
- Life insurance available
- Eligible for individuals who have retired Superannuation / retired due to VRS from any Central Govt. Department/ State Govt. Department/Local Bodies/PSU and eligible for pension
- Retired Defence Services Personnel are eligible (age no bar)
ICICI Bank Zero Balance Savings Account
Given below are the prime features and benefits of Basic Savings Bank Deposit Account (BSBDA) from ICICI Bank:
- Interest rate 3.00% p.a.
- Zero initial deposit required to open
- Single and joint holding available
- Complementary personalised RuPay Debit Card
- Free passbook
- Free cash deposit facility
- Internet banking and mobile banking available
- Self-attested KYC
PNB Zero Balance Savings Account
Features and Benefits of PNB Zero Balance Account (PNB Basic Saving Bank Deposit):
- Can be opened by an INDIVIDUAL singly or jointly, minors of the age of 10 years and above, minors under natural/legal guardianship
- Nomination allowed
- Cheque book of 10 leaves may be offered per year – free of cost
- Unlimited deposits can be made per month
- ATM-cum-debit card facility free of charge
Axis Bank Zero Balance Savings Account
Below-stated are the basic features as well as the benefits of the Axis Bank savings account offering zero balance maintenance facility:
- Up to 4.00% interest per year
- Opened under Pradhan Mantri Jan-Dhan Yojana Scheme
- RuPay Debit Card offered with Rs 40,000 ATM withdrawal limit
- 4 free withdrawals allowed every month
- Monthly e-statements, SMS alerts and passbook – for balance enquiry
Kotak Mahindra Zero Balance Savings Account
Here are the prime features & benefits of the Kotak 811 Zero Balance Savings Account:
- Can be opened online with Aadhaar & PAN
- Up to 4% interest per annum
- 2x reward points on with Kotak 811 credit card
- Free Kotak debit card (free lifetime free credit card may be offered, as per eligibility and credit score)
- 24×7 & free access to Kotak netbanking and mobile banking
- Virtual instant debit card issued with online shopping enabled
IDFC First Bank Zero Balance Savings Account
Check below for the main features as well as the benefits of IDFC Future First Savings Account with zero balance facility:
- Up to 6.75% interest p.a.
- Monthly interest credit
- Free & unlimited ATM transactions at any bank, anywhere in India
- Offers IDFC First VISA Signature Debit Card with airport lounge access & PA cover up to Rs 35 lakhs and more
- Eligibility: Graduate and postgraduate students from premier/identified educational institutes of India
Zero Balance Savings Accounts in Small Finance Banks
Here, we are mentioning some of the zero balance savings account options offered by the small finance banks in India:
- AU Small Finance Bank offers two types of zero balance accounts namely, AU Digital Savings Account and AU Abhi Account.
- Jana Small Finance Bank provides zero balance savings account under the name of Basic Savings Bank Deposit Account (BSBDA) with complementary RuPay Classic debit card.
- Utkarsh Small Finance Bank offers Basic Savings Bank Deposit Account (BSBDA) under its zero balance savings account category with free RuPay debit card at zero annual maintenance cost for the first year.
- Ujjivan Small Finance Bank offers Digital Savings Account with zero balance requirement that can be opened by a resident individual within the age (18-60 years).
- ESAF Small Finance Bank provides LALIT – Basic Savings Bank Deposit Small Account with the facility of maintaining zero balance. It offers basic RuPay Classic debit card with it at zero issuance charges and annual fee.
Difference between Current Account and Savings Account
In India, a current account and a savings account are two types of bank accounts that have different features and benefits.
A current account is typically used by businesses, companies, and individuals with high transaction volumes. The main features of a current account in India include:
- No limit on the number of transactions
- Allows overdraft facility
- Minimum balance requirements are higher than a savings account
- Interest rates are usually lower or none compared to a savings account
The main features of a savings account are:
- Limited number of transactions per month, especially at ATM and POS
- Suitable for salaried people
- No overdraft facility is provided (mostly)
- Lower minimum balance requirements compared to a current account
- Interest is provided, unlike in a current account
Overall, a current account in India is designed for frequent transactions, while a savings account is designed for individuals who want to save money over a longer period of time and earn interest on their deposits.
For ease, we have drawn a quick comparison of current account vs. savings account here:
|Meant for daily transactions
|Usually transactions are limited
|Suitable for businesses, organisations, etc.
|Suitable for salaried employees, students, children (10 – 18 years old) and homemakers, etc.
|Overdraft facility provided
|No overdraft facility
|Low to No interest
|Option to earn interest (up to 4%)
|Higher minimum balance requirement
|Lower minimum balance requirement
FAQs on Savings Accounts in India
Mostly, it’s the small finance banks that offer the highest interest on savings bank accounts. It may go up to 8% p.a. Note that this rate is applicable for certain balances only. Check top savings bank interest rates.
A zero balance savings account is one where you do not have to maintain a minimum amount in your account. There are no penalties for keeping the balance next to nil.
Yes, most of the banks now offer the option to open a savings account online via virtual verification over video call. For this, Aadhaar Card is mandatory. Also, such accounts are named as Digital Savings Accounts.
Usually, interest is credited on an annual basis in savings accounts in India.
Best savings account is the one that fits your needs perfectly. If you’re looking for higher withdrawal limits, rewards points and more, a premium savings account is best for you. Similarly, for someone not looking to maintain a minimum balance, a zero balance savings account is perfect. Check types of savings accounts.
IDFC Bank is one of the few banks offering the monthly credit of interest, contrary to annual credit norms.
Thomas Cook India has collaborated with various banks in India, like SBI and IndusInd Bank, where they provide a savings travel plan under which individuals can do small savings per month. This amount can then be used for domestic or international travels. Customer can choose and book the type of holiday (scheduled for future (12 months) (domestic/international) and the holiday destination being offered by Thomas Cook.
A checking account is a current account which is suitable for daily transactions. Such an account does not offer any interest and if it does, it’s very low. More details here.