High interest rate saving account ?

Hi All,

Let’s start the discussion on most common topic related to banks & financial institutions with high rate of interest.

Best NBFCs, banks & financial institutions who providing best interest rate on their saving accounts, best features of the account as on october 2023.

Also share your banking experience with product facility, pros and cons.
 
If you want to open savings account for senior citizens, go for senior citizen saving scheme account which offers competitive 8.2% interest rate annually.
 

Thor

KF Ace
I have two suggestions for you:

1.) Unity Small Finance Bank - This bank provides 6% interest p.a. on savings account upto the balance of 1 Lakh and provides 7% interest p.a. on balance above 1 Lakh.

2.) Kotak Mahindra Bank - Normally, you get 3.5% to 4% interest p.a. but if you enable ActivMoney service on your savings account then, you will get flat 7% interest p.a. on your savings account. For more details, you can visit your branch.
 

17ysaurabh

KF Mentor
Well, the private banks are giving much higher interest rates on savings accounts.
RBL Bank: Upto 7% interest
IDFC Bank: Upto 6.75% interest
Yes Bank: Upto 6.25% interest
Federal Bank: Upto 6% interest
SBM Bank: Upto 5% interest
 

AmritSaroe

KF Ace
Well, the private banks are giving much higher interest rates on savings accounts.
RBL Bank: Upto 7% interest
IDFC Bank: Upto 6.75% interest
Yes Bank: Upto 6.25% interest
Federal Bank: Upto 6% interest
SBM Bank: Upto 5% interest
I have a question, these interest rates are on savings account but how do they calculate on what principal they provide interest as money is always moving in savings account
 

17ysaurabh

KF Mentor
I have a question, these interest rates are on savings account but how do they calculate on what principal they provide interest as money is always moving in savings account
Well, banks calculate interest on saving accounts using the average daily interest method. I'll try to explain it in steps:
1. Banks determine the periodic interest rate.
Example:
Annual interest rate = 4%
Monthly interest rate = 4% / 12
2. Now, banks see daily what the balance is at EOD and then calculate interest using this periodic interest rate.
3. Suppose they have to calculate the monthly interest amount. Then, they just take an average of the daily interest rate of the month.
 

17ysaurabh

KF Mentor
8.2% on savings account balance? It's not on FD?
I didn't exactly get what you were asking. Just want to clarify a few things:
  • Senior Citizen Saving Scheme is an investment scheme.
  • It's not a savings account or FD.
  • Once you invest in this scheme, your money is locked in for 5 years and you get interest on the principal amount.
 

AmritSaroe

KF Ace
I didn't exactly get what you were asking. Just want to clarify a few things:
  • Senior Citizen Saving Scheme is an investment scheme.
  • It's not a savings account or FD.
  • Once you invest in this scheme, your money is locked in for 5 years and you get interest on the principal amount.
i was thinking they are giving 8% interests to seniors like we get in savings account 4% interest. but if its locked for 5years then its not that. its kind of an FD
 

17ysaurabh

KF Mentor
i was thinking they are giving 8% interests to seniors like we get in savings account 4% interest. but if its locked for 5years then its not that. its kind of an FD
Exactly.
If you try for premature withdrawal, they even charge 1% to 1.5% on the principal amount.
Yeah, it's a little bit like FD. The only difference is that you get the interest earned in every quarter. While in FD you get the total interest earned at the maturity usually.
 

AdityaJain

KF Rookie
Hi All,

Let’s start the discussion on most common topic related to banks & financial institutions with high rate of interest.

Best NBFCs, banks & financial institutions who providing best interest rate on their saving accounts, best features of the account as on october 2023.

Also share your banking experience with product facility, pros and cons.
AU Small Finance Bank Savings Accounts, it goes up to 7.25%, but here is a catch with every bank that says we give this and that rates in the savings account.
See attached screen shot; it is the same in every bank.
 

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