How to Get More Interest on Savings Account

While a Savings Account is the first choice among Indians to park their savings, the interest rates are relatively low. However, there are some clever ways to earn more interest. Read on to know more about it. 

Savings Accounts are very popular among Indians and they are often perceived as the best way to save money and earn interest. Apart from being one of the safest avenues to park your hard-earned money, Savings Account is easy to maintain, operate and provide various facilities such as bank draft, cheque, Debit Cards etc.

The only concern you may have while keeping your money in a Savings Account is the interest rate. A Savings Account offers the lowest interest rates as compared to various other investment options available.

However, you can maximise your Savings Account monthly interest rates by following some easy guidelines and checkpoints.

Before discussing how to earn interest on Savings Accounts, it is crucial to know the concept of interest rates and how they are calculated.

Banks pay a certain amount of interest on the savings maintained in a Savings Account to encourage depositors to save more money. The concerned bank periodically revises the interest rate as per the RBI (Reserve Bank of India) mandate.

At AU Small Finance Bank, the interest on a Savings Account is calculated on the daily closing balance but paid out monthly. The general formula to calculate the monthly interest pay-out is as follows:

Monthly interest = Daily balance in the account *Number of Days * Rate of Interest per annum/Total number of days in a year

For example, assuming that the daily balance is INR 2 lakhs and the rate of interest is 5%, the approximate monthly interest would be:

Monthly Interest= 2 lakhs *30* (5%)/365 = INR 821 

You must know that AU Small Finance Bank offers higher interest rates on Savings Account with greater deposits. Example, you can earn a much higher interest on your Savings Account by maintaining an average balance of INR 25 lakhs compared to the interest you can get on maintaining an average balance of less than INR 1 lakh.

1. Maintain High Monthly Average Balance

Savings Account holders today are required to maintain a low average monthly balance in their accounts. However, you can earn interest on a Savings Account at a higher rate if you maintain a high monthly average balance. 

1. The power of compounding works better with a high average balance. Example, a 3% interest rate on INR 10,000 is INR 300, but the same rate of interest on INR 1,00,000 comes to INR 3000.
2. Banks follow an incremental rate of interest.

2. Choose from a Wide-Range of Savings Accounts

At AU Small Finance Bank, we offer a wide range of Savings Accounts to customers targeting their needs. Example, we offer Savings Accounts specifically suited to children, students, NRIs, women, and Senior Citizens. Such accounts offer higher interest rates along with some other unique benefits. So choose the best Savings Account for yourself.

3. Link Your FDs for Sweep-in Facilities

You can link multiple Fixed Deposits(FDs) to your Savings Account. Once linked, you can activate the sweep-in facility on your FDs that allows you to withdraw money without breaking the entire amount partially.

This is the best way to earn interest from your existing FDs without compromising on the liquidity of your Savings Account.

4. Open Digital Savings Account

Some Banks provide the facility of opening a Virtual Savings Account through their Digital Banking App/NetBanking portal.  

At AU Small Finance Bank, we provide the benefits of high-interest rates and zero account balance requirements on opening Savings Accounts through our AU 0101 App/NetBanking. You also get account statements, interest certificates and other banking services through the app or portal.

A Savings Account should not necessarily mean compromising on interests for the sake of the safety of funds. A little awareness and homework can help you get the best interest rates. Furthermore, Digital Banking is widely recognised as the way forward to the banking industry. Use this to your advantage when opening your Savings Account.