Month: February 2021

Savings Accounts Interest Rates

Minimum and maximum deposit limit

The minimum balance threshold in private bank savings accounts opens at Rs 500 and continues up to a limit of Rs 10,000. Compared with public sector banks, this is maintained higher by the banks because they are more involved in going out with their facilities to the salaried middle class and self-employed individuals. The minimum balance limit is kept at Rs 5000 by Bandhan Bank whereas a cap of Rs 2,500 to Rs 10,000 is kept by Axis Bank and HDFC Bank respectively.

Eligibility criteria

For different banks, the eligibility requirements may be different to open a savings account. Below are the basic ones:

• He or she must be a resident individual
• He or she must have a minimum age limit of 18 years of old
• Non-Resident Indians
• He or she must have a valid/stable source of income

Documents required

The below-listed documents must be kept handy by the individual while opening a savings account with a bank:

• Identity proof: PAN, Voter ID, Passport, Aadhaar Card, 2 passport size photographs
• Address proof: Passport, Utility bills of the last 3 months, Aadhaar Card, Voter ID Card
• Income proof: Bank statement of the last 6 months, salary slip for the last 3 months

Taxation

Under the heading ‘Income from other sources’, the interest you earn from a savings account is subject to taxation. Furthermore, an exemption of up to Rs 10,000 on such interest income is accounted under Section 80TTA and, thus, only interest received above Rs 10,000 is subject to taxation.

Note:

Excluding the basic savings bank deposit account, the minimum balance standard for a regular savings account is taken into consideration here. A higher interest rate on a savings account will only be an acceptable deal if you go for the bank which has a solid reputation in the market, excellent service norms, a broad branch network and city/nation wide ATM facilities.