Introduction:
Both State Bank of India (SBI) and Canara Bank are among the largest public sector banks in India. If you are an account holder in either of these banks and have deposited or plan to deposit ₹1 lakh, it’s essential to understand how your money is managed, what benefits you receive, and what rules apply.
1. Types of Bank Accounts
In both SBI and Canara Bank, ₹1 lakh can be deposited in various types of accounts:
- Savings Account: Regular savings account earns you interest on your deposit, typically between 2.70% to 3.50% annually.
- Fixed Deposit (FD): Offers higher interest (typically 6% to 7.5%, depending on tenure and age).
- Current Account: Used for business transactions; interest is not paid on deposits.
- Recurring Deposit: Allows monthly deposits to build up savings over time with interest.
2. Interest on ₹1 Lakh Deposit
- SBI Savings Account:
- Interest rate: ~2.70% per annum.
- Monthly interest on ₹1 lakh: ₹225 approximately.
- Canara Bank Savings Account:
- Interest rate: ~2.90% to 3.00% per annum.
- Monthly interest on ₹1 lakh: ₹240 to ₹250 approximately.
For better returns, banks recommend converting excess savings into a fixed deposit, where interest can be 6.5% or more depending on duration and senior citizen status.
3. Insurance Coverage – DICGC
The Deposit Insurance and Credit Guarantee Corporation (DICGC) insures deposits up to ₹5 lakh per account holder per bank. So, your ₹1 lakh in both SBI and Canara Bank is completely safe under government regulation.
This insurance covers:
- Savings accounts
- Fixed deposits
- Current accounts
- Recurring deposits
Even in the unlikely event that the bank fails, DICGC guarantees repayment of up to ₹5 lakh including principal and interest.
4. PAN Requirement and Tax Implications
If your total deposits in one financial year exceed ₹1 lakh in cash, banks are required to report the transaction to the Income Tax Department.
- PAN Card: Required for cash deposits above ₹50,000 at one time.
- TDS on Interest: If interest income exceeds ₹40,000 in a year (₹50,000 for senior citizens), the bank may deduct TDS (Tax Deducted at Source) at 10%.
- Form 15G/15H: Can be submitted to avoid TDS if your total income is below the taxable limit.
5. Minimum Balance and Charges
- SBI Savings Account:
- Urban areas: ₹3,000 minimum.
- Rural/Semi-urban: ₹1,000–₹2,000.
- Penalty: ₹10 to ₹15 + GST if balance falls below limit.
- Canara Bank Savings Account:
- Varies from ₹500 to ₹1,000 depending on branch type.
- Non-maintenance charges are similar to SBI.
So, with ₹1 lakh in your account, you’ll easily avoid any penalties and maintain a healthy banking relationship.
6. Benefits of Maintaining ₹1 Lakh
- Eligibility for Pre-approved Loans: Higher balance may make you eligible for pre-approved personal or credit card loans.
- Better Service: Some branches offer priority services to high-balance customers.
- Lower Transaction Charges: With sufficient balance, banks may waive charges on cheque books, ATM withdrawals, etc.
- Overdraft Facility: You may be offered a secured overdraft limit against your deposit.
7. Digital Banking and Safet
- Mobile Banking & UPI: Both SBI and Canara provide secure apps and internet banking for easy fund transfer and account monitoring.
- Cybersecurity: Keep your mobile PINs, OTPs, and passwords confidential. ₹1 lakh is a substantial amount and should be protected with two-factor authentication and safe digital practices.
Conclusion
Keeping ₹1 lakh in your SBI or Canara Bank account is safe, insured, and potentially beneficial. Whether for daily use, earning interest, or availing financial services, it’s a practical decision. Just be aware of the tax rules, PAN requirements, and keep your account safe from cyber threats.