Savings Account – Types, Features, Interest Rates 2025, Fees & Charges
Introduction
A savings account is the foundation of personal finance for most individuals. It’s not just a place to park your money—it’s also a tool that helps you earn interest, manage expenses, make digital payments, and maintain financial discipline.
In 2025, with evolving digital banking and rising interest rates, it’s important to understand different types of savings accounts, their features, interest rates, and associated charges. Let’s explore all you need to know before opening or switching your savings account.
What is a Savings Account?
A savings account is a type of deposit account offered by banks and financial institutions that allows individuals to deposit money, earn interest on the balance, and withdraw funds when needed. It is designed for safe storage of funds while encouraging individuals to develop the habit of saving.
Unlike current accounts, which are primarily used for business transactions and do not offer interest, savings accounts provide interest income on your idle funds and are meant for personal use. You can access your money anytime through ATMs, online banking, UPI, or by visiting a bank branch.
It is the most basic and essential banking product and is widely used by students, salaried employees, homemakers, senior citizens, and even minors.
Key Features of a Savings Account
1. Interest Earning
- Savings accounts offer interest on the deposited amount.
- The interest is typically between 2.70% and 8 % per annum in 2025, depending on the bank.
- Interest is calculated daily and paid monthly or quarterly.
2. Safety of Funds
- Funds in a savings account are safe and secure.
- Deposits up to ₹5 lakh are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) under RBI guidelines.
- It is one of the lowest-risk financial instruments.
3. Liquidity
- You can withdraw money anytime using ATM, UPI, cheque, mobile banking, or by visiting the branch.
- It offers high liquidity, unlike fixed deposits or recurring deposits.
4. Minimum Balance Requirement
- Some accounts require a minimum average monthly balance (₹1,000 – ₹10,000).
- Failure to maintain this balance may result in penalty charges.
- However, zero-balance savings accounts are also available.
5. Digital Banking Access
- Most savings accounts now come with:
- Internet banking
- Mobile banking apps
- UPI and QR code payments
- SMS and email alerts
- You can easily monitor your account, make payments, or transfer funds 24/7.
6. ATM/Debit Card Facility
- Banks issue a debit card (physical or virtual) linked to your account.
- This allows for ATM withdrawals, online shopping, POS payments, and more.
7. Cheque Book Facility
- Most savings accounts come with a cheque book, allowing you to issue cheques for payments.
- Useful for rent, loan EMIs, or formal business transactions.
8. Account Statements and Passbook
- You can access monthly/quarterly statements digitally or request a physical passbook.
- Helps in tracking your income, expenses, and maintaining financial records.
9. Auto Debit/Standing Instructions
- You can set up auto-debit instructions for bill payments, EMIs, SIPs, insurance premiums, etc.
- Ensures timely payments without manual effort.
10. Joint Holding & Nomination
- You can open the account jointly with family members.
- Also allows nomination, so that funds can be transferred in case of the account holder’s demise.
Saving Account Interest Rates 2025
Banks decide the interest rates offered on savings accounts and update them from time to time. Generally, small finance banks provide the highest interest on savings accounts. Below listed are the savings account interest rates from top banks in various categories.
| Top Savings Accounts by Public Sector Banks | ||
| Bank Name | Highest Interest Rate | Amount Requirements |
| Punjab & Sind Bank | 5.00% | Above Rs. 500 Crore |
| Bank of Baroda | 4.50% | Rs. 1,000 Crore and above |
| Central Bank of India | 4.50% | Above Rs. 1000 Crore |
| Union Bank | 4.20% | Above Rs. 2000 Crore |
| Canara Bank | 4.00% | For outstanding balance of Rs. 2,000 crore & above |
| Bank of India | 3.10% | Above Rs. 1500 Crore |
| State Bank of India | 3.00% | Balances less than Rs. 10 Crore |
| Top Savings Accounts by Private Sector Banks | ||
| Bank Name | Highest Interest Rate | Amount Requirements |
| Bandhan Bank | 8.00% | Daily Balance above Rs. 50 crore to Rs. 250 crore |
| DCB Bank Ltd. | 8.00% | On balances from Rs. 1 crore to less than Rs. 3 crore and from Rs. 25 crore to less than Rs. 300 Crore in the account |
| CSB Bank Ltd. | 7.85 (for amount above Rs. 1 lakh) | Above Rs. 200 crore |
| RBL Bank | 7.50% | Above Rs. 25 Lakh and up to Rs. 3 Crore & above Rs. 75 Crore up to Rs. 125 Crore |
| IDFC First Bank | 7.25% | > 5 lac <= 100 crore |
| Federal Bank Ltd. | 7.00% | Rs. 40 Crore to less than Rs. 150 Crore (3.00% for balance up to Rs. 1 lakh and 7% for balance above Rs.1 lakh to less than Rs. 150 Crore |
| IndusInd Bank | 7.00% | Daily balance above Rs. 10 Lakh up to Rs. 100 Crore |
| Top Savings Accounts by Small Finance Banks | ||
| Bank Name | Highest Interest Rate | Amount Requirements |
| ESAF SFB | 8.00% | Above Rs.15 Crore (i.e., for incremental amount above Rs.15 Crore) |
| Equitas SFB | 7.80% | Above Rs. 25 crore |
| Suryoday SFB | 7.75% | Above Rs. 5 crore up to & including Rs. 25 crore |
| Utkarsh SFB | 7.75% | Incremental Balance above Rs. 50 crore |
| Shivalik Small Finance Bank Limited | 7.60% | Above 7 Crore to 10 Crore |
| Jana SFB | 7.55% | More than Rs. 10 crore and up to Rs. 20 crore |
| Ujjivan SFB | 7.50% | Above Rs. 25 lakh |
To know savings account interest rates in detail, visit Savings Account Interest Rates 2025
Eligibility and Documentation to Open a Savings Account
In order to open a savings account, applicants have to fulfill certain requirements such as:
- The applicant should be a resident individual
- Foreigners residing in India can also open certain savings accounts
- Regular savings accounts need the applicant to be at least 18 years old whereas applicants below 18 years of age can open minor/kids savings accounts
- A PAN card is mandatory to open a savings account
- Linking a savings account with an Aadhaar card makes the account eligible to receive government subsidy benefits
- Photograph or live video may be required based on the type of account opened
- A number of other documents such as driving license, voter ID, ration card, etc. can be provided as proof of identity and residence
How to Apply for Savings Account
With digitalization, banks have made it very easy for applicants to open a savings account online or by visiting the bank branch at their convenience. One can opt for opening digital savings account online or visit the bank to open a special savings account such as a senior citizen’s account, minor savings account, women’s savings account, etc.
Steps to Apply for Savings Account Online
- Visit the bank’s website or download the mobile app
- Select the type of account you want to open
- Provide basic details such as name, date of birth, address, PAN, Aadhaar number, etc.
- Verify your KYC by providing documents or video KYC
- After successful verification, your savings account will be fully operational
Steps to Apply for Savings Account Offline
- Visit the bank’s branch
- Fill the savings account opening form
- Attach self-attested copies of your proof of address and identity
- Deposit the required amount as per the account type
- Your account will be opened and shall be fully functional after successful verification
Types of Savings Accounts
Banks provide a number of savings account options to applicants. These accounts are designed to provide special benefits to specific customers. Let us find out various savings accounts offered and who should open such an account:
Regular Savings Account
A regular savings account is one of the simplest savings accounts and any person can open this account. The account holder earns some interest on the amount present in this account and the bank may charge an annual fee for the maintenance of these accounts. Most banks require account holders to maintain a minimum average monthly balance in these accounts. These accounts are opened only after a complete KYC is done.
Instant Digital Savings Account
These digital savings accounts can be opened online within a few minutes via online banking or a mobile app. However, if the account holder does not carry out complete KYC within a specified period, the account is put on hold. Many instant digital savings accounts have a maximum limit of Rs. 1 Lakh on the total amount deposited in the account.
Zero Balance or Basic Savings Bank Deposit Account
These accounts do not have the limitation of maintaining the minimum average monthly balance and the account holder can have these accounts with no amount deposited in the account. As there is no MAB requirement, the bank applies certain restrictions on these accounts such as a cap on the number of withdrawals from the ATM, type of debit card available, no chequebook facility, etc.
Women’s Savings Account
This account is provided exclusively to women who get special privileges on these accounts such as a special debit card for women, relaxed minimum balance requirements, preferential loan and credit offers, etc. Many banks provide discounts on lockers, unlimited ATM cash withdrawals, complimentary multicity chequebooks, and other privileges to women account holders.
Kids’ Savings Account
These accounts are opened in the name of children below 18 years of age by their parents or guardian. These accounts are meant for children to understand the basics of banking and inculcate disciplined financial behaviour from the very beginning. Parents or guardians need to provide their identity proof and declaration to open such accounts. Kids’ or junior savings accounts are accompanied by regulated deposit and spending limits.
Senior Citizens’ Savings Account
A senior citizen savings account is meant for those above 60 years of age. Accountholders get special privileges such as preferential interest rates on deposits, lower interest on credit, dedicated relationships manager, etc.
Family Savings Account
People of one family can open multiple accounts under one family ID and avail facilities of multiple banking instruments such as savings accounts, fixed deposits, recurring deposits, etc. People covered in these accounts can be spouse, children, parents, grandchildren, grandparents, in-laws, etc.
Salary Account
Salary accounts are designed for salaried accountholders who would get their salaries every month in these accounts. The bank provides special privileges with these accounts such as zero balance accounts, free chequebook, and international debit card, preferential interest rates on loans, complementary personal accidental insurance cover, etc.
Top Savings Account Providers
In India, banks are allowed to provide savings accounts to accountholders as per RBI’s mandate. Let us find out about various top banking institutions that offer savings accounts to customers.
Public Sector Banks
These are nationalised banking institutions and cater to more than 50% of the market. The government has a majority stake in these banks. The main objective of these banks is social welfare and thus offer public-friendly services and products.
Private Sector Banks
Banks where a majority stake is held by private shareholders such as institutions, individuals, groups of persons, etc. are known as private sector banks. All regulations set forth by RBI are binding upon all private sector banks as well.
Small Finance Banks
Small Finance Banks (SFBs) provide basic banking services such as deposits and lending under the small finance bank license. These banks cover those sections of the society that are not covered by the big public sector or private sector banks and help in the financial inclusion of a large section of the society.
Regional Rural Banks
Regional Rural Banks (RRBs) are government-owned scheduled commercial banks that operate on a regional level in various states of India. These banks are meant to serve rural areas with basic banking services.
Advantages and Limitations of Savings Accounts
Pros
- Money can be deposited or withdrawn any number of times through a savings account (may vary based on the type of account)
- Option to transfer money online and offline
- Option to withdraw funds anywhere in India through ATMs
- Amount up to Rs. 5 lakh insured by DICGC in case the bank defaults
- Add-on insurance benefits such as personal accident insurance cover, lost card liability, health insurance, etc.
- Special offers and discounts based on the type of account and debit card provided
- Option to set standing instructions for bill payments
Cons
- Relatively lower rate of interest on the money deposited in the bank
- The accountholder has to maintain the minimum balance in the account that can be used for better returns in other investment instruments
- Failure in maintaining a minimum balance or Monthly Average Balance (MAB) may incur a penalty
- A fee is charged on ATM withdrawal after exceeding the maximum number of free transaction
How to Choose the Most Suitable Savings Account
It is very important to make a well-researched choice for suitable savings account as it is hard to pick an account by just looking at the account features. It is advisable to compare the savings account options against diverse parameters in order to maximize your earnings and earn better rewards. Here are listed some important parameters that can help you in making the right choice.
- Savings Account Interest Rate
Most banks offer an interest rate starting from 2.70% on savings bank accounts. But, there are many banks that offer a higher interest rate up to 7.50% provided you maintain a specific balance in the savings account.
- Minimum Balance Requirement
Some banks require you to maintain a minimum balance in your savings account, while others do not. If you fail to maintain the minimum account balance, the bank might charge a penalty. Therefore, it is best to check what suits you the best, a savings account with a minimum balance or a zero balance savings account.
- Debit Cards Features
Many banks provide debit cards that come with benefits such as joining benefits, travel benefits, complimentary movie tickets, discounts on purchases, no-cost or low-cost EMIs, etc. If these features meet your lifestyle, you can select an account that can provide you with these offers and deals.
- Additional Features
Banks offer a number of facilities with a savings account such as net and mobile banking, doorstep cash deposit/withdrawal, free cheque book, etc. Such facilities help complete bank transactions without visiting the bank and from the comfort of your home or office. Check for the facilities attached to the savings account before making a choice.
- Low Account Maintenance Charges
There are a number of fees and charges applicable to the daily operations of a savings account such as fund transfer charges, chequebook issuance charges, ATM withdrawal fees, statement issuance charges, ATM card annual fees, etc. You should select an account that provides you with an optimum balance of services and the cost of availing them.
