These savings accounts fetch up to 7% returns; here's how to track interest payments

Earning interest from a savings bank account could be one of the easiest ways to get returns. Currently, some lenders are delivering as much as 7 per cent returns on savings accounts. The Reserve Bank of India's (RBI's) repo rates hikes have pinched loan borrowers hard but also resulted in increasing the fixed deposit (FD) and savings account interest rates.

Let us revisit the benefits of a savings account.

Interest rate

The interest rate applicable on a savings account may vary depending on type of account, average balance maintained in the account and the condition laid down by bank. For instance, the bank may offer a higher interest rate if the balance in a savings account is above a certain threshold limit. Interest is calculated on progressive balance. The savings account interest rates are usually payable quarterly and there's no maturity period of funds lying in a savings account.

Here's the interest rate offered by some banks, which in some cases goes up to 7 per cent:
 

(Caption: Data as on respective banks' website on September 1, 2022; Interest rate on Savings Account for randomly selected Public & Pvt Banks considered for data compilation; Minimum balance requirement for a regular savings account and excluding BSBD account. *AMB: Average Monthly Balance; MAB: Monthly Average Balance; MB: Minimum Balance.)

Tracking interest payments

Before opening a savings account, a person must know when the bank credits interest. Account holders can also track it online or through bank statements. Most banks credit the interest rate earned during a quarter in the customer's account on the last day of the same quarter.

"Your savings account holds your money safely. It also gives you interest on your deposits. You can deposit your money into private and government banks, cooperative banks, and post offices. Banks regularly send emails and newsletters to inform their customers about the account benefits and updates. You must track the interest rate earned on your savings account. It is easy to log in to your online banking portals or mobile apps and check the interest credited in your savings account," said Adhil Shetty, CEO, Bankbazaar.com.

Some banks even offer attractive interest on the savings account balance, which is at par with the average interest rate offered in an FD account.

For safety purposes, one must know that the Deposit Insurance and Credit Guarantee Corporation (DICGC) insures only deposits up to Rs 5 lakh (including interest).

Further, savings account with a sweep-in/Flexi deposit facility can also be a good idea if a person is looking for a higher return on savings account deposits.