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For most ordinary balances, a Federal Bank savings account and the cited State Bank of India (SBI) and Punjab National Bank (PNB) examples pay about 2.50% a year, so the better choice usually depends on fees, cash usage, account variant and local access—not a headline rate. Federal Bank’s published schedule is dated 16 July 2026; SBI’s 15 June 2025 schedule and PNB’s 1 July 2025 schedule have different effective dates. “Public-sector bank” is a category, not one standardized account. Confirm the exact product and current schedule before applying.
The comparison below uses Federal Bank, SBI and PNB as named examples. It does not rank every public-sector bank, and it does not establish that one bank has a better app, branch network or service quality in your location.
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| Name | Best for | Key spec | Free plan / price | Checked |
|---|---|---|---|---|
| Federal Bank savings account | Customers wanting online or branch opening and a clearly published cash-handling limit | 2.50% p.a. up to ₹1 lakh; daily end-of-day calculation; quarterly credit; higher tiers only at very large balances | Five cash transactions or ₹5 lakh a month, whichever comes first, free for individual savings customers; then ₹4 per ₹1,000 or part, minimum ₹100 per transaction | November 2026 |
| SBI savings-bank account | Customers who value a published waiver of the savings-account average-balance penalty | 2.50% p.a. across balances under the cited schedule, effective 15 June 2025 | Average-monthly-balance penalty waived from 11 March 2020; other service, card, ATM and transaction charges still require checking | November 2026 |
| PNB general savings account | Customers comparing location-based balance thresholds or a basic zero-minimum-balance variant | 2.50% p.a. up to ₹100 crore and 2.70% above ₹100 crore under the cited schedule, effective 1 July 2025 | General account: ₹500 rural, ₹1,000 semi-urban, ₹2,000 urban/metropolitan quarterly average balance; nil non-maintenance charge. PNB also lists a basic savings account with zero minimum balance | November 2026 |
Prices checked November 2026.
Which account pays more interest on a normal balance?
On the published examples, none has a meaningful rate advantage for a routine retail balance. Federal Bank lists 2.50% per annum on balances up to and including ₹1 lakh; SBI lists 2.50% across balances; and PNB lists 2.50% up to ₹100 crore. Those figures come from schedules with different effective dates, so check the live pages immediately before opening or moving money.
| Bank and source | Effective date shown | Published rate bands | How interest is described |
|---|---|---|---|
| Federal Bank savings-rate schedule | 16 July 2026 | 2.50% p.a. up to and including ₹1 lakh. The page also displays very-large-balance tiers, including 4.00% for ₹10 crore to below ₹50 crore and 5.50% for ₹10 crore to below ₹200 crore; verify the exact slab wording before relying on a high tier. | Calculated on daily end-of-day balances and credited quarterly. |
| SBI savings-bank deposits | 15 June 2025 | 2.50% p.a. across account balances. | The cited page provides the rate; it does not establish a Federal-style daily-calculation or quarterly-credit rule for every SBI variant. |
| PNB deposit interest rates | 1 July 2025 | 2.50% p.a. up to ₹100 crore; 2.70% above ₹100 crore. | Use the bank’s current schedule for the applicable product and crediting terms. |
As an illustration only, 2.50% on ₹1 lakh for a full year is ₹2,500 before any tax or changes in balance. Actual interest varies with daily balances, the bank’s calculation method and the time the rate remains in force. The important decision rule is simple: compare the rate that applies to your own balance, not the maximum number shown anywhere on a rate page.
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The illustration is not a guaranteed payout: it assumes the full ₹1 lakh remains in the account for the whole year and the rate does not change. If your balance rises and falls, the daily amount on which interest is calculated also changes. For Federal Bank, the cited schedule expressly describes daily end-of-day calculation and quarterly crediting. Do not assume that another bank follows the same calculation or crediting timetable unless its applicable terms say so.
Do Federal Bank’s higher tiers matter to ordinary savers?
Usually not. The additional Federal Bank rates cited above begin at balances measured in crores, not the balances most people keep for salary credits, bills and emergency savings. A high advertised tier is therefore not evidence that a standard account earning 2.50% will suddenly earn that rate.
If you genuinely maintain a very large balance, ask the bank to confirm in writing whether the rate is applied to the entire balance or only the portion within a slab, which account variants qualify, and whether the schedule has changed. Do not compare a large-balance tier with a retail rate without matching the balance band and product.
The published Federal Bank schedule displays high bands with wording that should be checked carefully before calculating a return. Confirm the precise balance range, how the bank treats balances at band boundaries, and whether a quoted rate applies to the whole balance or a portion of it. Likewise, PNB’s cited 2.70% rate applies only above ₹100 crore. For someone holding less than that, the quoted PNB top rate is not the relevant comparison. At such balances, it is sensible to request the applicable terms directly rather than infer a payout from a headline table.
How do minimum-balance and cash-handling fees differ?
There is no single “fee” that makes one bank cheaper. Minimum-balance rules, cash deposits and withdrawals, ATM use, debit-card fees, transfers and other services are separate cost categories. The account variant and branch location can change the answer.
| Bank | Balance or cash rule in the cited material | What it does not tell you |
|---|---|---|
| Federal Bank | For individual savings customers, five cash transactions (deposits and withdrawals) or ₹5 lakh per month, whichever comes first, is the stated free limit. Beyond that, the schedule lists ₹4 per ₹1,000 or part thereof, with a minimum ₹100 per transaction. The liability-fee schedule is effective 1 April 2026. | This is not a complete account-cost total. Check the relevant variant and separate ATM, card, transfer and other charges in the full Federal Bank fee schedule. |
| SBI | SBI says the penalty for non-maintenance of average monthly balance in savings accounts was waived effective 11 March 2020. | A waiver of that one penalty does not mean debit-card, ATM, cash, transfer or other service charges are zero. Read the current SBI service-charge schedule. |
| PNB general savings account | The page lists quarterly average-balance requirements of ₹500 at rural branches, ₹1,000 at semi-urban branches and ₹2,000 at urban or metropolitan branches, with a nil non-maintenance charge. | PNB also lists a separate basic savings account with zero minimum balance. The general account’s location thresholds should not be used to describe every PNB product. |
Federal Bank’s rule is activity-based: a customer can reach the limit through only a few large cash transactions or many smaller ones. PNB’s figures are balance thresholds measured quarterly, and SBI’s cited statement concerns a penalty waiver. They are not directly interchangeable measures.
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For Federal Bank, “five transactions or ₹5 lakh, whichever comes first” means you should track both transaction count and total monthly cash value. If you cross either stated limit, the schedule lists a charge beyond it. The ₹4-per-₹1,000-or-part figure is not the only number to consider: the stated minimum is ₹100 per transaction, so a small amount above the free allowance may still be subject to that minimum. Ask how the schedule applies to your account and transactions before estimating your monthly cost.
Similarly, a nil non-maintenance charge at PNB does not make the general account’s balance threshold disappear; the page still lists the applicable quarterly average. And SBI’s waiver concerns a particular penalty, not all services that may have charges. Compare these terms separately: the amount you need to keep, the penalty if you do not, and the fees for transactions or optional services.
What does Federal Bank’s digital and branch access include?
Federal Bank says savings accounts can be opened online or offline and lists internet banking, fund transfers, e-statements and online bill payments among its features on its savings-account page. Those are bank-published feature statements, not independent evidence about app usability, uptime, call-centre performance or branch density.
The reviewed SBI and PNB pages do not provide a fair, current, nationwide comparison of app quality or local ATM and branch availability. Before choosing, search for a branch and ATM you can realistically reach, check which channels support the transactions you use and ask whether cash services are available at your preferred location. A convenient nearby branch can matter more than a small rate difference when you regularly deposit cash, update documents or need in-person help.
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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsAccess is local as well as digital. A service listed on a product page does not tell you whether a branch is convenient for your commute, whether a particular cash service is offered at the location you intend to use, or how well an app works for your needs. Check the channels you personally rely on: for example, whether you can complete a transfer online, receive an e-statement and pay bills through a listed feature, and where you would go for a transaction that requires in-person assistance.
Do not treat the Federal Bank feature list as proof that its digital experience is better than SBI’s or PNB’s, or assume that a bank’s overall network description settles access in your neighbourhood. Verify nearby ATMs and branches for the exact bank you are considering and consider how often you would use them. The material here does not establish a winner for reach, reliability or service quality.
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Which account fits different usage patterns?
Start with your own balance and transaction pattern. The following cases show how to apply the published terms without treating any bank as a universal winner.
If your balance is below ₹1 lakh
Federal Bank’s cited rate is 2.50% up to and including ₹1 lakh, while SBI’s cited rate is 2.50% across balances and PNB’s is 2.50% up to ₹100 crore. Interest therefore does not decide the comparison on these examples. Check minimum-balance conditions, cash needs, card and ATM charges, and whether the branch or digital channel suits you.
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If your balance sometimes dips below the amount you expect to maintain, look beyond the interest rate to the exact variant’s balance rule. SBI’s cited savings-account average-monthly-balance penalty waiver and PNB’s nil non-maintenance charge are relevant statements, but they do not establish that every account condition or service is identical. Federal Bank’s listed cash allowance may be more relevant if you handle cash often. Choose by the cost and access pattern you are likely to experience, not by assuming the same account terms apply across a bank’s products.
If you rarely handle cash
Federal Bank’s five-transaction/₹5 lakh free limit may never be reached, but you should still check the rest of its fee schedule. SBI’s average-balance penalty waiver may be useful if your balance fluctuates, while PNB’s nil non-maintenance charge removes a charge for falling below the listed quarterly threshold; neither statement eliminates every possible service fee.
For a mostly digital customer, review the fees that remain relevant even when branch cash is not: debit-card issuance or renewal, ATM usage, transfers and any other service you expect to use. The cited pages do not provide one common total-cost figure that can be compared across all three banks. Make a short list of your expected transactions and check each against the current schedule for your chosen account.
If you make frequent cash deposits or withdrawals
Count both the number and value of your monthly cash transactions. Under the cited Federal Bank schedule, exceeding five transactions or ₹5 lakh—whichever comes first—moves the account into the stated charge calculation, subject to the ₹100 minimum per transaction. Compare that specific cost with the cash-service terms for the exact SBI or PNB variant and branch you would use.
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Also distinguish branch cash transactions from ATM withdrawals when checking each bank’s schedule. The Federal Bank figure cited here concerns cash transactions as described in its liability-fee schedule; it does not provide a complete ATM fee comparison. Ask which transaction types count toward the free limit and which have separate rules, rather than assuming all ways of accessing cash are treated alike.
If you use a rural, semi-urban or metropolitan PNB branch
PNB’s general account page gives different quarterly average-balance figures by branch location: ₹500 rural, ₹1,000 semi-urban and ₹2,000 urban or metropolitan, with nil non-maintenance charge. Confirm that your selected product is the general account and not a different variant; the separately listed basic savings account has zero minimum balance.
That distinction matters when comparing a zero-minimum-balance option with the general savings account. The basic account is a separate product, not just a different name for the general account’s location-based thresholds. Read the conditions attached to the actual variant you intend to open and make sure any comparison of balance requirements uses the same type of account.
If you keep crores in the account
Only then do the cited Federal Bank and PNB higher tiers become potentially relevant. Ask for the current slab, the calculation basis and the exact qualifying account before moving funds. A rate difference that applies only above ₹100 crore or in multi-crore bands should not drive a retail account decision.
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If branch or digital access is your priority
Use your own location and routine as the test. If you often need face-to-face help or cash services, identify the branch you would actually visit and confirm the service you need is available there. If you expect to bank remotely, verify that the features you need—such as transfers, statements or bill payment—are offered for the exact account. Federal Bank lists online and offline opening and several digital features, but that list alone cannot tell you whether the service will suit you better than another bank’s.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How should you compare the exact account variants?
Use this checklist before applying. Save a copy of the schedules you relied on, because rates and charges can change after your account is opened.
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- Name the product, not just the bank. Record the exact Federal Bank, SBI or PNB savings-account variant, along with the date of the rate and fee schedule. For PNB, distinguish the general account from its separately listed basic savings account.
- Match your balance band. Write down your usual and peak balances. Ignore higher tiers that your balance cannot reach. If your balance is near a threshold, ask how the bank applies the applicable slab.
- Estimate cash activity. List expected monthly deposits and withdrawals, their values and whether they occur at a branch or through an ATM. For Federal Bank, test both the transaction-count and ₹5 lakh limits.
- Check balance measurement. Determine whether the product uses daily balances, monthly averages or quarterly averages. Federal Bank’s cited schedule uses daily end-of-day balances; PNB’s general account page states quarterly average-balance thresholds.
- Price the whole service bundle. Check debit-card issuance and annual fees, ATM limits and excess-use fees, transfers, cash handling, cheque services and replacement charges. The cited headline rules do not cover all of these.
- Verify access. Confirm online onboarding, branch hours, ATM location and the channels available for the transactions you actually make. Federal Bank explicitly lists online and offline opening; do not assume identical availability for every SBI or PNB product.
- Ask about transaction definitions. Check whether the cash limit applies to the transaction types you expect to make and whether a separate schedule governs ATM use or other channels. Do not infer a rule from a bank’s headline fee figure.
- Recheck immediately before submission. The schedules here have effective dates ranging from June 2025 to July 2026. Rates, waivers and fees may be revised, so use the bank’s current official page and ask the branch or customer service team to clarify any mismatch.
A useful way to compare is to create a simple monthly estimate rather than trying to find one “cheapest bank.” Put your expected cash activity, likely balance and expected use of cards, ATMs and transfers beside the applicable charges. Mark items that you do not use as not relevant, but do not treat them as free. This makes the comparison personal to your routine and avoids overvaluing a rate or fee that will not affect you.
What common comparison mistakes should you avoid?
- Calling all public-sector banks one product: SBI and PNB already show different account structures, and other public-sector banks may publish different rates and fees.
- Using the highest rate as the normal rate: Federal Bank’s extra tiers and PNB’s rate above ₹100 crore concern exceptionally large balances.
- Equating a waived penalty with free banking: SBI’s statement removes the cited average-balance penalty, not every possible charge.
- Comparing unlike time periods: Federal Bank’s 2026 fee schedule and rate schedule do not share the same effective date, and SBI and PNB rate pages are dated differently.
- Ignoring transaction definitions: “Cash transactions,” ATM withdrawals, digital transfers and card purchases may be treated differently. Ask which activities count under the relevant schedule.
- Assuming digital features prove service quality: A list of internet banking or e-statements does not establish performance, support quality or local network reach.
- Confusing no penalty with no requirement: PNB’s general account page still lists location-based quarterly average-balance thresholds even though the non-maintenance charge is nil.
- Comparing a product page with a different variant: A bank can offer multiple savings products with different balance requirements or terms. Compare the exact account you can open, not just a bank name.
So, which is better for a savings account: Federal Bank or a public-sector bank?
For a normal balance, the cited rates point to a tie at about 2.50% rather than a clear winner. Choose Federal Bank when its online/offline opening options, digital features and published cash-handling limit fit your routine and the full fee schedule works for you. Choose an SBI or PNB product when its particular balance and service terms, branch location or cash requirements better match your needs—while remembering that “public-sector bank” is not a single set of terms.
The sound choice is the exact account whose applicable rate, balance rule, cash costs, card and ATM charges, digital channels and nearby access match your behavior. Reconfirm every figure on the official schedule immediately before applying.
Frequently Asked Questions
Does Federal Bank credit savings interest every month?
Its cited savings-rate schedule says interest is calculated on daily end-of-day balances and credited quarterly. That timing is separate from the annual rate, so plan cash flow around quarterly credits rather than expecting a monthly deposit.
What does PNB’s nil non-maintenance charge actually mean?
It means the PNB general savings page states no charge for failing to meet its listed quarterly average-balance threshold. It does not remove other possible charges, and a different PNB variant may have different conditions.
Is SBI’s average-balance penalty waiver the same as having no account fees?
No. SBI’s statement concerns the penalty for not maintaining the savings-account average monthly balance, waived effective 11 March 2020. Debit-card, ATM, cash, transfer and other service charges still need to be checked in the current schedule.
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Should I switch banks just because another page shows a higher savings rate?
Only if the higher rate applies to your actual balance and exact account variant. The Federal Bank and PNB higher tiers cited here start at exceptionally large balances, so they generally do not change the decision for ordinary savers.
Which is better for a low-balance savings account: Federal Bank, SBI or PNB?
The cited schedules show about 2.50% p.a. for ordinary balances, so they do not identify a clear interest-rate winner. Compare the exact account’s balance terms, other fees and nearby access; SBI’s cited average-balance penalty is waived, and PNB lists a separate basic account with zero minimum balance.
