Savings account in Private Bank or Public sector bank

POSTED BY Atul ON January 23, 2011 5:23 pm COMMENTS (6)

Would you open savings account in Public Sector Bank or Private Sector Bank? Facilties like Internet access, 24 hour customer care, free cheque book etc. are provided by both types. However one distingushing factor I see is the minimum Quarterly Balance to be maintained.

ICICI, HDFC require Rs 10,000/- to be maintained as AQB, however SBI,BoI has Rs 1000/- limit.

I would rather invest the remaining Rs9,000/- in MFs,stocks and earn good returns rather than getting 3.5% interest.

Readers, please share your views.



6 replies on this article “Savings account in Private Bank or Public sector bank”

  1. VS says:

    In terms of services, private banks are way above public sector banks. The one thing you have to bear in mind is that you have to be a very “disciplined” customer when dealing with private banks. Failure to keep AQB as specified by them results in penalties. This can be avoided if you invest in certain FDs which entitle you to have zero balance in the SB account. I am aware that in the Saving Max account of HDFC, having an FD of 1 lakh entitles you to have a zero balance SB account. In my opinion if you like a pleasant banking experience and favour good ambiance, clean interiors and no crowds at teller counters, you can count on private banks for this.Most private banks also offer the services of a “relationship manager”. Please don’t accept all that he / she says and do have another source to confirm his offers. Also the attrition rate in some private banks is very high and you will not come to know if your relationship manager has left for a better job. Private banks also offer high value withdrawals on their debit / credit cards and this may be useful in an emergency (provided of course you have adequate balance in your SB account)

    As someone has already mentioned, it will also be wise to have an account with a public sector bank. But, yes, they have a laid back attitude. You will not get any special treatment even if your funds with them are high. You will get that initial warm welcome based on what high amount you are going to deposit and after that you are like any other customer. It will not occur to them if your balances become high you can be given personalised service. I am speaking from experience !!! It made a big difference when I opted to move my amounts from a public sector bank to a private bank. I was straight away given “premier” service at the private bank. It is only when you transfer the funds, do the staff of the public sector banks wake up and start asking you “WHY ?”


  2. Sohil says:

    If you are good in banking and tracking your funds plus there is always surpless in your account and plus you not the type of using credit card to huge extent than private is better.

    Only problem with public is though you know what you are doing.But something goes wrong they are least interested in helping you and also the time wasted in their services are not worth.Though they carry highest safety and also charges are less in many extent.

    Best practice is to have multiple accounts savings in both private and public bank and use facilities as per your need.When one is extensively used ,use other.And try to use atm ,debit card the most and for depositing cash use private and than transfer via neft to public one.Less hassle just one visit to public bank for pass book entries thats it.

  3. Atul says:

    My view point for this topic was to have more money at disposal without paying any penalty.

    I can always have emergency funds both in public and private sector bank. However my emergency fund will be higher in Public sector bank compared to Private bank where AQB is Rs 10,000 and one has to pay quarterly fine if the AQB falls below the limit.

    Assume I have one account each in Public Bank (AQB as Rs 1000) and Private Bank (AQB as Rs10,000/-). In both accounts I deposit Rs 10,000/-. In case of public Bank I have Rs 9,000/- as emergency fund, ready for investment w/o paying fine. However with Private Sector Bank if I use Rs9,000/- for emergency I have to pay fine if I don’t bring back the AQB to Rs 10,000/-



  4. Atul

    Saving account should have limited money decided by you on how much emergency funds you want in your bank account, above and over that , you should invest it , atleast in liquid fund


    1. shashank kashettiwar says:


      I have experienced that service charges by PSU banks on DD, depositing cash in other branch than your home branch, a/c statement charges, cheque bounce charges are lesser compared to private players. On these counts I would give them prefference.


  5. First of all, you’ll always have some extra money in your bank account. You will never, infact should not, invest all your money in mutual funds. Have some liquidity also. So, maintaining Rs.10,00 balance is not a difficult task. Secondly, private banks gives better service than public banks even if it is PNB or SBI. Some branches may have good staff to give good services. But overall, I would avoid them for any banking need. Their common lunch time, early closing timings makes banking difficult. Even if one employees is absent on a particular day, no other is capable to do his duties. You need to come again. All above, what if you need some cash in emergency during their strike days?

    My vote for private banks. I’ve been banking with ICICI and HDFC from the last 7-8 years and don’t have any problem. Just avoid cheque bounce and maintain sufficient balance as per their terms.

    Hope it will help you.

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