Difference Between High-Interest Savings Account and Regular Savings Account

July 03, 2025

high-interest-savings-account-vs-traditional-savings-account

When it comes to saving, most people turn to traditional or regular savings accounts offered by banks. However, there is another option that could potentially help you grow your savings at a faster rate –  high-interest Savings Accounts .

 

In this article, we will explore the key differences by comparing high-interest savings accounts vs regular savings accounts. We will make the account comparison based on interest rates, account features, and how they can impact your savings growth. By comparing these two types of accounts, you'll be able to make an informed decision about which one suits your needs better.

 

 

High-Interest Savings Account vs Regular Savings Account: A Comparison

 

1. Interest Rates: The Key Factor in Savings Growth

High-interest savings accounts are designed to offer a higher Annual Percentage Yield (APY) when compared to regular savings accounts. These accounts are typically offered bysmal finance banks like Ujjivan SFB, and aim to attract savers who want to earn a more competitive rate on their savings. 

 

Traditional or regular savings accounts are what most people are familiar with. These accounts are offered by traditional banks and may have lower interest rates compared to high-interest savings accounts.

 

Example: Let's say you have ₹1,00,000 in your high-interest savings account and ₹1,00,000 in your regular savings account. The high-interest savings account offers an APY of 3% while the regular savings account offers an APY of 1%. Over a year, your savings growth can differ significantly, as you can see below:

  • High-Interest Savings Account: ₹3,000
  • Regular Savings Account: ₹1,000

 

2. Fees and Penalties: Watch Out for Hidden Charges

Banks that offer high-interest savings accounts often have lower fees when compared to traditional banks. They may even waive monthly maintenance fees, making it more affordable to maintain your account. However, read the terms and conditions carefully to ensure there are no hidden charges or penalties for exceeding certain transaction limits. 

 

Traditional banks may charge monthly maintenance fees for regular savings accounts. These fees can eat into your interest earnings, especially if you have a low balance in your account. Additionally, exceeding the allowed number of monthly withdrawals can result in penalties.

 

3. Safety and Protection: Securing Your Deposits

Both regular and high-interest savings account deposits are insured under DICGC up to ₹5 lakh per depositor per bank. To nullify risk, you may consider spreading out your savings across bank accounts.

Final Thoughts

In conclusion, to make the right decision, consider your accessibility needs, the importance of higher interest rates for your savings growth, and any associated fees or penalties. By comparing these factors, you can choose an account that best aligns with your financial goals.

 

If you're just starting out in your savings journey, opening a Savings Account with Ujjivan Small Finance Bank can be a good start. We have a wide variety of Savings Accounts catering to different financial needs - sign up for the one that meets your financial goals. Alternatively, you can browse through Ujjivan SFB product suite - our wide range of financial products are designed to make your financial life better.

  

Disclaimer:

The contents herein are only for informational purposes and generic in nature. The content does not amount to an offer, invitation or solicitation of any kind to buy or sell, and are not intended to create any legal rights or obligations. This information is subject to updation, completion, amendment and verification without notice. The contents herein are also subject to other product-specific terms and conditions, as well as any applicable third-party terms and conditions, for which Ujjivan Small Finance Bank assumes no responsibility or liability.

 

Nothing contained herein is intended to constitute financial, investment, legal, tax, or any other professional advice or opinion. Please obtain professional advice before making investment or any other decisions. Any investment decisions that may be made by the you shall be at your own sole discretion, independent analysis and evaluation of the risks involved. The use of any information set out in this document is entirely at the user’s own risk.  Ujjivan Small Finance Bank Limited makes no representation or warranty, express or implied, as to the accuracy and completeness for any information herein. The Bank disclaims any and all liability for any loss or damage (direct, indirect, consequential, or otherwise) incurred by you due to use of or due to investment, product application decisions made by you on the basis of the contents herein. While the information is prepared in good faith from sources deemed reliable (including public sources), the Bank disclaims any liability with respect to accuracy of information or any error or omission or any loss or damage incurred by anyone in reliance on the contents herein, in any manner whatsoever.

 

To know more about Ujjivan Small Finance Bank Products Visit:"https://www.ujjivansfb.in"

 

All intellectual property rights, including copyrights, trademarks, and other proprietary rights, pertaining to the content and materials displayed herein, belong

to Ujjivan Small Finance Bank Limited or its licensors. Unauthorised use or misuse of any intellectual property, or other content displayed herein is strictly prohibited and the same is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person’s nationality, residence or otherwise) be contrary to law or registration or would subject Ujjivan Small Finance Bank Limited or its affiliates to any licensing or registration requirements.

   

Apply Now

FAQs

1. What is the difference between a high-interest savings account and a regular savings account?

High-interest savings accounts offer higher interest rates compared to regular savings accounts. They are typically offered by small finance banks.

2. How do I choose between a high-interest savings account and a regular savings account?

Consider factors such as interest rates, convenience, fees, and deposit protection when making your decision.

3. Which bank offers high-interest savings account?

Ujjivan SFB offers multiple high-interest savings accounts, including Digital Savings Account, Maxima Savings Account and Privilege Savings Account, among others.

Latest Blogs