SBI, ICICI Bank and HDFC Bank pay an interest rate of 3.5-4% on savings deposits.Small finance banks offer higher interest rates than their larger peers.
Small finance banks such as ESAF Small Finance Bank, Equitas Small finance Bank and Suryoday Bank offer higher interest rates on savings, fixed deposit (FD), and recurring deposit (RD) accounts, compared to major banks such as State Bank of India.
For example, the key lenders of the country - SBI, ICICI Bank and HDFC Bank - offer an interest of 3.5-4 per cent on savings account deposits.
But Equitas Small Finance Bank offers an annual return of 6-6.5 per cent on deposits in savings accounts.Why small finance banks offer higher interest ratesSmall finance banks are relatively new as compared to leading banks such as SBI, HDFC Bank and ICICI Bank.
Small banks need customers to trust them with their hard-earned money and that is why interest rates on all types of deposits - savings, recurring and fixed - are higher compared to regular banks, say wealth planners.Major commercial banks offer modest interest rates on savings accounts.
But small finance banks offer higher interest rates even on savings deposits.Here's a comparison of interest rates paid on savings account deposits by ESAF Small Finance Bank, Equitas Small finance Bank and Suryoday Bank:ESAF Small Finance BankESAF Small Finance Bankpays the following interest rates on savings account deposits, according to the bank's website - esafbank.com:Savings Bank AccountRate of Interest Applicable from1stApril 2018NormalSenior CitizenDomesticUp to and including 1 lakh4.00%4.00%Above 1 lakh up toand including 10 lakhs (i.e for incremental amount aboveINR 1 Lakh only)6.50%6.50%Above 10 lakhs (i.e for incremental amount above INR 10 lakhs only)7.00%7.00%a.
With cheque book facilityUp to and Including 1 lakh4.00%4.00%Above 1 lakh up to and Including 10 lakhs6.50%6.50%(i.e for incremental amount above INR 1 lakhs only)Above 10 lakhs (i.e for incremental amount above INR 10 lakhs only)7.00%7.00%a.No Frills Account/Basic Savings Bank AccountUp to and Including 1 lakh4.00%4.00%Above 1 lakh up toand including 10 lakhs (i.e for incremental amount above INR 1 lakh only)6.50%6.50%Above 10 lakhs (i.e for incremental amount above INR 10 lakhs only)7.00%7.00%Equitas Small finance Bank On balances up to Rs 10 lakh, Equitas Small Finance Bank offers an interest rate of 6 per cent, according to the bank's website - equitasbank.com.
On savings balances above Rs 10 lakh and up to Rs 5 crore, it offers an interest rate of 6.50 per cent is applicable.
These interest rates are applicable to basic and small savings accounts, standard savings accounts, regular savings accounts, value plus accounts and my savings account, according to the bank.Suryoday Small Finance BankSuryoday Bank pays an interest rate of 6.25 per cent per annum on balance up to Rs.
1 lakh, 7.25 per cent on balance over Rs.
1 lakh and up to Rs.
10 lakh, and 7 per cent on balance over Rs.
10 lakh, according to the bank's website - suryodaybank.com.
These interest rates are applicable on both savings and salary savings accounts.