Savings Account Interest Rates Of India's Top Banks—Why The Benefit Is Temporary

Savings accounts for most people serve as a landing account for income, which then flows into investments and other payables.

With demat accounts and SIPs linked to this account, the inflow into the account is usually steady. Given this, one could benefit from a high rate of interest on their savings account. However, this benefit is temporary.

Below is a list of India's top banks and the interest rates they offer on their savings accounts.

"There will be some banks that offer more interest if one keeps more money in it. If you have a couple of lakhs, you can take advantage of this interest rate without opening a fixed deposit," said Arnav Pandya, founder of Moneyeduschool.

Opting for the bank offering the highest interest rate will provide a temporary benefit to the account holder, but this may not be a permanent advantage.

"Convenience is an advantage here, but I would not advise shifting banks for interest. These rates may change or even disappear," he said. These rates can be lowered or withdrawn by the banks. The difference will not add up to much unless there are large amounts involved.

While the top banks do not offer interest rates over 3.50%, small finance banks often have higher rates in place.

"Smaller banks have more attractive rates. Having one small finance bank in your banking portfolio is fine, but one cannot put all their money there," said Pandya.

There are certain risks associated with depositing one's money into small finance banks.

"Smaller banks can run into trouble as they operate in smaller areas. If something goes down, one will be left scrambling." If technical problems stretching to a day or two arise, then one will not be able to access the money they have.