Bank savings accounts are the first preference of any Indian to park their savings and earn returns safely. A savings account provides customers with various services and benefits. These include returns, a debit card facility, and access to other banking services and investment tools.
The best banks to open savings accounts in India offer best interest savings accounts with interest as high as 6.50%. Additionally, you can follow a few tips to get the best interest savings accounts for your funds. Let us know how you can get the highest interest rates from the best banks to open savings accounts in India.
Tips to Get the Highest Interest Rates on Bank Savings Accounts
Undoubtedly, savings accounts are the best way to save money and earn a return. Savings accounts make transactions easy with features such as cheques, demand drafts, and debit cards. But the primary concern is always the returns on a savings account. Here is how you can make the most of your bank account:
- Look for the best bank to open savings accounts in India: The Reserve Bank of India (RBI) has set the base rate for every bank. But banks have the discretionary power to increase the interest rate above this base rate. Before selecting a bank to open a savings account, look for the interest rate it offers. Compare the interest rate offered by various banks and select the bank with the best-in-class interest rates. Leading banks in India offer returns as high as 6.50% on savings accounts, so why settle for less?
- Maintain a high monthly average balance: Banks’ interest rate is based on your deposited amount. On higher outstanding balances, banks may offer higher interest rates. Therefore, park your idle funds in the savings account to get better returns.
- Maintain the average balance to avoid penalties: Banks charge a penalty if the monthly average balance in a savings account falls below the minimum requirement. Note that you only need to maintain this balance every day of the month. Simply adjust this amount to maintain above the average minimum monthly balance requirement to avoid penalty charges and increase your earnings.
- Use the idle funds effectively: Use the sweep-in and sweep-out facility in the savings account to get better returns on idle funds. As per this facility, the customer’s idle funds are transferred to a Fixed Deposit income that generates higher returns. If the customer needs the funds for an emergency, they can transfer them back to their savings account. Similarly, if the funds in the savings account fall below the minimum requirement, they can transfer funds from their Fixed Deposit account to avoid penalty charges on the savings account. Customers can set the limit in their bank account and the bank will transfer any additional funds available to the Fixed Deposit account.
- Opt for criteria-based savings accounts: Banks offer higher interest rates on bank accounts for certain specific criteria. These may include a higher minimum account balance, the number of monthly debit card transactions and more. If such criteria suit you, opt for such savings account for better earnings.
- Specific savings accounts: Some savings accounts, like premium accounts, women’s savings accounts, and senior citizens accounts, garner a higher interest rate than others. Customers can choose a bank account that matches their demographic and earn better interest rates.
- Invest in certificates of deposit: Banks offer certificates of deposit (CDs) to savings account holders. Customers can use the funds in their savings accounts to get certificates of deposit. The certificates of deposit offer higher interest rates than regular savings accounts and have a tenure between three months to one year.
By following the above tips, you can easily make the most out of your savings account and enjoy the dual benefit of security of deposit and high returns.