Question 1

What is minimum average balance (MAB) on a savings account?

Accepted Answer

MAB is the average daily balance you must maintain over a calendar month. Falling below it triggers penalty charges that can exceed interest earned. Compare MAB requirements alongside interest rate — a high-yield account with steep penalties may not suit irregular depositors.

Question 2

How are savings account interest rates set in India?

Accepted Answer

Banks set savings rates based on liquidity, RBI policy, and competition. RBI deregulated savings deposit rates in 2011; most banks pay 2.5%–4% p.a., with some digital banks offering higher tiers for balances above thresholds. Rates can change with notice — check the latest schedule on the bank's website.

Question 3

What are ATM withdrawal limits on savings accounts?

Accepted Answer

Free ATM withdrawals at own-bank ATMs are typically unlimited; other-bank ATM usage may be capped (for example, 3–5 free transactions per month at metro locations under RBI norms). Beyond free limits, banks charge per transaction. Compare limits if you rely heavily on cash.

Question 4

Is UPI available on all savings accounts?

Accepted Answer

Most Indian savings accounts support UPI via the bank's app or third-party UPI apps linked to the account. Features such as auto-pay, credit line on UPI, and international UPI are rollout-dependent. Compare digital banking and UPI support if mobile payments are your primary channel.

Question 5

Is interest on savings accounts taxable in India?

Accepted Answer

Yes. Interest is taxable as income from other sources. Section 80TTA allows a deduction up to ₹10,000 on interest from savings accounts (₹50,000 for senior citizens under 80TTB on deposits). Banks deduct TDS if interest from all deposits with the bank exceeds ₹40,000 in a year (₹50,000 for seniors).

Question 6

What is the difference between zero-balance and regular savings accounts?

Accepted Answer

Zero-balance accounts (often Basic Savings Bank Deposit Accounts under RBI norms) have no MAB requirement but may cap debit transactions and exclude premium features. Regular accounts offer higher limits and better digital tools but require MAB. Pick based on your average balance and transaction volume.

Compare Savings Product

Frequently Asked Questions

Related Calculators