Opening a bank’s savings account is the first step towards securing your financial future. Choosing the right bank that offers you higher interest rates ensures your money grows faster. But with so many leading banks offering savings accounts, how do you find which provides the best returns?
This blog post shares a brief guide to shortlist the leading banks’ basic key parameters and use a savings calculator to identify accounts that earn maximum interest income.
Key Things to Consider When Opening a Savings Account
Here are critical factors to evaluate when selecting the best bank for savings accounts:
- Interest Rates: The primary factor is that higher interest rates mean better returns on your savings. Compare rates across banks.
- Minimum Balance: Lower minimum average balance requirements are preferable. Seek banks that waive off balance needs.
- Fees & Charges: Compare penalties for non-maintenance of minimum balance or online transactions.
- Digital Convenience: Opt for banks with feature-rich banking apps and websites for better accessibility.
- Safety & Security: Always put your money only with reputed and trusted banks. Avoid risky options.
While interest rate should be a key criterion, other parameters must also be assessed for a complete evaluation. Now, let’s see how to shortlist the best savings accounts.
How to Find the Highest Interest Rate Savings Accounts
Follow these steps to find banks offering top interest rates:
1. Research Interest Rates Offered
Do thorough research on interest rates offered on savings accounts by leading banks. Compare rates across public, private, and small finance banks.
2. Prepare a Shortlist
Create a list of banks offering the highest interest rates from 6% to 7.25% annually. This becomes your primary shortlist for consideration.
3. Compare Other Parameters
Next, investigate these shortlisted banks in terms of other aspects, such as minimum balance rules, unlimited transactions, safety standards, digital features, etc.
4. Rank Your Top Picks
Finally, rank your top picks based on all parameters to arrive at 1-2 banks offering the highest interest rates, convenience, and security. For instance, IDFC FIRST Bank offers up to 7.25% annually.
How Much Interest Can You Earn? Savings Calculator
Once you’ve shortlisted the savings accounts offering the highest interest rate savings account, use a savings calculator to estimate your potential returns.
Steps to Use a Savings Calculator:
- Enter Deposit Amount: Input the principal you plan to save.
- Input Interest Rate: Specify the interest rate offered by the account.
- Select Tenure: Enter the desired savings period.
- Compounding Frequency: Specify whether interest compounds monthly, quarterly, or annually.
The calculator will project the total maturity value and interest earned over the selected period.
For instance, With a 6% rate, your money nearly doubles in 10 years due to the compounding effect. This demonstrates the impact that even a slight difference in interest rate can have over the long term.
Tips to Maximise Interest Income
Follow these tips to earn higher interest from your savings account:
- Open an account with a bank that offers additional rate incentives for high-average balances
- Set up standing instructions to transfer surplus monthly income from the main account
- Avoid withdrawing large amounts in one go to ensure the quarterly average balance stays high
- Spend/withdraw only through digital means like ATM, NEFT, RTGS, and UPI to avoid charges
- Use sweep-in or auto-transfer facilities from linked accounts to maintain balance
So take advantage of banks’ features to maximise your interest income.
Conclusion
We hope this detailed guide has helped you learn how to shortlist and choose the most suitable savings account by comparing interest rates, minimum balance needs, fees, safety standards and convenience features across banks. Use our interactive calculator to determine the returns you can expect over the long term.
Finding the best bank for savings accounts that pays you the highest interest and has good service standards takes some research, but achieving your financial goals faster is worth the effort.
