Best Savings Accounts That Give Better Returns Than Bank FDs

As the repo rate dropped to historically low banks, fixed deposit (FD) interest rates have been pushed to decline, reducing their appeal in recent years. Based on the tenure of the deposit, major public sector and private sector banks are currently giving an interest rate of between 2.5 percent-5.5 percent on their fixed deposits to the regular depositors. They bid up to 6 per cent interest on FDs for senior citizens. However some of the small private sector banks and small finance banks are also providing between 3% and 7.25% on their savings bank accounts. So, by keeping their money in a savings bank account instead of holding their money in FDs, depositors have a chance to gain higher interest. It is also worth noting here that the amount of interest received from fixed deposits and savings accounts is taxable as per the depositor’s tax slab. That being said, a deduction of Rs 10,000 in interest income received from the savings account is provided as per Section 80TTA. Therefore, the amount deposited in a small saving account or a smaller private sector bank’s savings account can theoretically gain a higher post-tax return than a fixed deposit in a major public or private sector bank. There are a few alternatives for you if you intend to park some of your money in high-yield savings accounts. And as of now the banks that offer higher interest rate on savings accounts opposed to FDs are tabulated below:

Top Private Sector Banks Giving Higher Interest Rates On Savings Accounts

Top Small Finance Banks That Offer Higher Interest Rates On Savings Accounts