Bank Of India Saving Account Interest Rate
In India there are different heads of income; viz., income from Salary, House property, Capital gain, Business & Profession and Income from other sources. Today we are here to discuss only a small part i.e. Interest Income of one of the head of income i.e. “Income from other sources”. You’ll learn about Taxation on Interest income including the important tax deductions available thereon.
- Bank Of India Saving Account Interest Rate
- State Bank Of India Saving Account Interest Rate
- State Bank Of India Saving Account Interest Rate
- Union Bank Of India Saving Account Interest Rates
Income from Other Sources: Meaning
Income from other sources is a head of income which includes the entire income amount which doesn’t fall in any of the other income heads. This may include but not limited to income like gift amount, interest income, lottery, awards, etc.
- For a high interest bank alternative, IndusInd also scores well by providing 6% interest rate on your savings account. Looking for a zero balance savings account, Kotak 811 Digital Bank could be an ideal choice.
- For account holders with cheque book facility, without cheque book facility, and for a no-frills savings account, the interest rate is 4%. What are the proofs to be submitted for address verification while opening a Central Bank of India savings account?
- This all started with SBI slashing interest rates on savings account to 3.5% on July 31, 2017 for balance less than Rs 50 Lakh. Reserve Bank of India (RBI) had deregulated the interest rate offered on Savings Account by banks in October 2011. It was expected then that a lot of banks would compete for this and offer competitive rates.
- But during the year 2012, Reserve Bank of India (RBI) has de-regulated interest on savings account and banks are now free to decide on the interest rate that they want to offer on savings account which directly benefits the customers.
IDFC FIRST Bank's Savings Account is our testament to putting our customers first. We offer one of the industry’s best savings account interest rates at 6% p.a., for balances up to Rs 1 Cr. What's more, you earn this interest on progressive balances in each interest rate slab, as applicable. That means you earn every single day.
Interest Income: Meaning
Interest income is an income which an individual earns from:
- Bank deposits,
- Deposits in other financial institution and
- Organizations like post office, trust, etc.
Taxation of Interest Income in India
Interest income in the hands of an individual is taxed under normal slab rates. Thus, assuming an individual has no other income then the first Rs.250,000 would be tax free. After that, the amount shall be taxed at the rate of 5% or 20% or 30% depending on the income tax slab rate respectively.
Before going into benefits and tax deduction for the said income; we need to check and understand different types of interest income. Let me walk you through the details of the same.
Types of Interest Income
So, have a look at the different types of interest income that you can earn from different sources in India.
1. Saving Deposit Interest Income:
Saving Deposit Interest is the income earned on any saving deposit scheme as defined under The Banking Regulation Act. In simplest words, it is the interest that you earn on the balance in your savings bank account.
2. Fixed Deposit Interest Income:
FD Interest is the income earned on any fixed deposit scheme. Simply stating, it is the interest earned on deposits which are made for a fixed period of time as defined under The Banking Regulation Act.
3. Recurring Deposit Interest Income:
RD interest is the income earned on any recurring deposit scheme. RD scheme is the deposit wherein a person agrees to deposit fixed amount at regular intervals for a fixed period of time, as defined under The Banking Regulation Act.
4. Post Office Deposit Interest Income:
In India there are a number of Post Office Saving Schemes for individuals to invest. So, you also earn income on these Post Office Deposit Schemes as defined under Post Office regulation.
Section 80TTA: Income Tax Deduction on Interest Income
Under Income Tax Act, Section 80TTA lays down the tax deduction rule for interest income.
As per Section 80TTA, an individual can claim a deduction of interest income up to Rs.10,000 if the interest income is earned through saving deposit scheme alone.
Section 80TTB: Tax Deduction on Interest Income for Senior Citizens
Also, in the Budget 2019 there was a new section introduced for Senior citizens i.e. Section 80TTB. Under Section 80TTB an individual who is 60 years or more can claim extra tax deduction of up to Rs.50,000 on interest income earned. The interest income may be from saving account or fixed deposit or post office deposit scheme.
However, if you as a senior person claim deduction under Section 80TTB you can’t claim Section 80TTA deduction.
Bank Of India Saving Account Interest Rate
No doubt, the Government offers additional tax benefits to senior citizens on interest and other incomes as well. And, that’s really good for our senior members.
Thus, only saving deposit interest income (senior citizens exception applies) has the benefit of tax exemption. Whereas other interest income like fixed and recurring deposit are subject to tax under section 194A at the rate of 10%.
You may also like: TDS on Commission or Brokerage U/s 194H
State Bank Of India Saving Account Interest Rate
Taxation of Interest Income: The Bottom Line
This was all about interest income and how it is taxed in India. If you have any other important points to add here, do let us know in the comments.
On a general basis, interest incomes are subject to tax under Section 194A at the rate of 10% at the time of payment. Banks deduct tax on fixed deposit income i.e. TDS on Interest only after a specified limit of Rs.10000 normally and Rs.50000 limit for senior citizens.
Moreover, it is an individual’s responsibility to add the interest income (savings+FD+other) to their total income while filing Income tax return.
Following two situations may be arise:
- You need to deduct appropriate tax which might be over 10% (already deducted) or
- You may have to claim refund in case excess was deducted earlier as TDS.
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Few people try to skip the interest income to avoid taxes thereon, this is not correct. Whatever way, you must include the interest income under the head “Income from Other Sources” in your ITR. Then, calculate the tax payable or refund as applicable.
Feel free to discuss for any queries on interest income and its taxation in India. You may also put your feedback or share views on any financial topic on our active discussion forum.
Banks offer a range of financial products to their customers to meet their needs. These products also include Savings Account. People park their money with Savings Account for a variety of reasons. The most attractive features offered by a Savings Account are liquidity of funds, provides ATM/Debit card, paying utility bills through standing instructions, platform for net banking, online shopping, viewing statements online and facility of mobile banking.
Earlier banks used to offer same rate on their savings accounts Interest rate i.e. 4% per annum and you used to get the same returns with any bank. But during the year 2012, Reserve Bank of India (RBI) has de-regulated interest on savings account and banks are now free to decide on the interest rate that they want to offer on savings account which directly benefits the customers. Due to stiff competition, banks have started paying higher saving interest rates like 6% to 7% in order to attract more and more people to open the account with them and enhance their customer base.
Savings Account Interest rates in 2021 is calculated on daily basis for the closing day balance which will get accumulated and will be paid to the customers on quarterly or half yearly basis. You can use Savings Interest Rate Calculator to calculate your saving interest.
Below list will help you selecting the best savings account in 2021 for parking your money in terms of higher interest rate and other features. It also facilitates you to calculate the interest amount on your deposit.
Important Aspects of a Savings Account that Should Be Kept in Mind
- Interest earned on the savings bank account is taxable. However, Section 80TTA of the Income Tax Act provides for a deduction of upto Rs 10,000 in each financial year. You will be eligible for this deduction whether the saving account is opened with a bank or a post office.
- Most of the banks offer you auto sweep savings accounts which provide a facility in which the bank interlinks your saving bank with a Fixed Deposit account and any excess amount in the savings bank is automatically transferred to the fixed deposit (FD). Under such account, your overall interest on savings account increases.
- You need to maintain a monthly average balance (MAB) in your savings account. If you fail to maintain the same, it attracts a non-maintenance fee. The monthly average balance (MAB) requirement varies from bank to bank and also varies based on whether it is in urban, semi-urban or rural branch.
- Savings accounts impose an upper limits on the number of free ATM withdrawals per month. If your ATM transactions go beyond this limit then they would be chargeable and you need to pay respective fee.
- Whenever there is no transaction in any account for more than a period of 24 months or 2 years, that account is categorised by the bank as a dormant account. Any savings or current account can become dormant due to prolonged non operation. You can reactivate your dormant account in some easy steps.
Saving Account Interest Rate List (as on 06 Mar 2021)
| Bank Name | Rates (p.a.) | Limit | Calculate |
|---|---|---|---|
| Rbl Bank | 6% 6% | Upto Rs 1 Lakh Above Rs 1 Lakh to Rs 10 Lakhs | |
| Dcb Bank | 4% 6% | Below Rs 1 Crore Above Rs 1 Crore to Rs 5 Crores | |
| Yes Bank | 5% 6% | Below Rs 1 Lakh Rs 1 Lakh to Rs 1 Crore | |
| Kotak Mahindra Bank | 5% 6% | Upto Rs 1 Lakh Above Rs 1 Lakh to Rs 1 Crore | |
| Bandhan Bank | 4% 6% | Below Rs 1 Lakh Rs 1 Lakh & above | |
| Indusind Bank | 4% 5% | Upto Rs 10 Lakhs Above Rs 10 Lakhs to Rs 1 Crore | |
| Laxmi Vilas Bank | 4% 5% | Upto Rs 1 Lakh Above Rs 1 Lakh to Rs 5 Lakhs | |
| Idbi Bank | 4% 4% | Upto Rs 25 Lakhs Above Rs 25 Lakhs | |
| Uco Bank | 4% 4% | Upto Rs 50 Lakhs Over Rs 50 Lakhs | |
| Bank Of India | 4% 4% | Upto Rs 50 Lakhs Above Rs 50 Lakhs | |
| State Bank Of Mysore | 4% 4% | Upto Rs 1 Crore Above Rs 1 Crore | |
| City Union Bank | 4% 4% | Upto Rs 1 Lakh Above Rs 1 Lakh | |
| Indian Bank | 4% 4% | Upto Rs 50 Lakhs Above Rs 50 Lakhs | |
| South Indian Bank | 4% 4% | Upto Rs 1 Lakh Above Rs 1 Lakh to below Rs 5 Crore | |
| Union Bank Of India | 4% 4% | Upto Rs 25 Lakhs Above Rs 25 Lakhs | |
| Jammu And Kashmir Bank | 4% 4% | For Any Amount Above Rs 10 Lakhs | |
| Bank Of Maharashtra | 4% 4% | Upto Rs 25 Lakhs Above Rs 25 Lakhs | |
| State Bank Of Hyderabad | 4% 4% | Upto Rs 1 Crore Above Rs 1 Crore | |
| Indian Overseas Bank | 4% 4% | Upto Rs 25 Lakhs Above Rs 25 Lakhs | |
| Tamilnad Mercantile Bank | 4% 4% | Upto Rs 1 Lakh Above Rs 1 Lakh | |
| United Bank Of India | 4% 4% | Upto Rs 50 Lakhs More Than Rs 50 Lakhs | |
| Karnataka Bank | 3% 4% | Upto Rs 1 Lakh Above Rs 1 Lakh to Rs 50 Lakhs | |
| Canara Bank | 4% 4% | Upto Rs 50 Lakhs Above Rs 50 Lakhs | |
| State Bank Of Patiala | 4% 4% | Upto Rs 1 Crore Above Rs 1 Crore | |
| Dhanalakshmi Bank | 4% 4% | Upto Rs 50 Lakhs More Than Rs 50 Lakhs | |
| Oriental Bank Of Commerce | 4% 4% | Upto Rs 25 Lakhs Above Rs 25 Lakhs | |
| Vijaya Bank | 4% 4% | Below Rs 50 Lakhs Rs 50 Lakhs & above | |
| Karur Vysya Bank | 4% 4% | Upto Rs 1 Lakh Above Rs 1 Lakh | |
| Central Bank Of India | 4% 4% | Upto Rs 50 Lakhs Above Rs 50 Lakhs | |
| State Bank Of Travancore | 4% 4% | Upto Rs 1 Crore Above Rs 1 Crore | |
| Federal Bank | 4% 4% | Below Rs 50 Lakhs Rs 50 Lakhs & above upto Rs 10 Crores | |
| Allahabad Bank | 4% 4% | Less than Rs 40 Lakhs Rs 40 Lakhs & above | |
| Punjab National Bank | 4% 4% | Upto Rs 25 Lakhs Above Rs 25 Lakhs | |
| Jammu And Kashmir Bank | 4% 4% | Upto Rs 10 Lakhs Above Rs 10 Lakhs to Rs 1 Crore | |
| Axis Bank | 4% 4% | Below Rs 50 Lakhs Rs 50 Lakhs & above | |
| Corporation Bank | 4% 4% | Below Rs 50 Lakhs Rs 50 Lakhs & above | |
| State Bank Of Bikaner And Jaipur | 4% 4% | Upto Rs 1 Crore Above Rs 1 Crore | |
| Hdfc Bank | 4% 4% | Below Rs 50 Lakhs Rs 50 Lakhs & above but below Rs 500 Crores | |
| Andhra Bank | 4% 4% | Upto Rs 50 Lakhs Above Rs 50 Lakhs | |
| Punjab And Sind Bank | 4% 4% | Upto Rs 20 Lakhs Above Rs 20 Lakhs | |
| Dena Bank | 4% 4% | Upto Rs 25 Lakhs Above Rs 25 Lakhs | |
| Syndicate Bank | 4% 4% | Upto Rs 25 Lakhs Above Rs 25 Lakhs | |
| Icici Bank | 4% 4% | Below Rs 50 Lakhs Rs 50 Lakhs & above | |
| Bank Of Baroda | 4% 4% | Upto Rs 50 Lakhs Above Rs 50 Lakhs | |
| State Bank Of India | 4% 4% | Upto Rs 1 Crore Above Rs 1 Crore | |
| Catholic Syrian Bank | 4% 4% | Upto Rs 1 Lakh Above Rs 1 Lakh to Rs 50 Lakhs |
Who can Open a Savings Bank Account?
- Savings Bank Account can be opened in the name of an individual or in the names of two or more individuals.
- If it is a Joint account, it can be operated jointly or either/ survivor or former/ survivor clause.
- Savings Bank Account can be opened in the name of minor but is required to be operated by natural guardian.
Features of Savings Bank Account
State Bank Of India Saving Account Interest Rate
- No special rate is offered to senior citizen
- TDS is not applicable
- Nomination facility is available
- Loan against deposit is not permitted
- Interest rate is decided by the bank
Facilities Offered by Savings Account
Union Bank Of India Saving Account Interest Rates
- Unique/ Personalized Account Number
- ATM-cum-Debit Card
- Cheque Book
- Pass book/ Bank Statement
- Nomination
- Standing Instructions
- Cheque Collection
- Instant Credit of Outstation Cheque upto Rs.15,000/-
- Internet Banking
- Mobile Banking
- Fund Transfer using NEFT, RTGS & IMPS
- SMS Alerts
- e-Statement
- Several offers and discounts on Debit Card