What is a savings account?
A savings account is an account in your name at a bank where you can keep money and take it out when you need it. The bank holds the money, but it is yours, and the bank must pay it back when you ask. In return for keeping it there, the bank pays a little interest or profit.
It is mainly a place to keep money organised: your salary comes in, bills go out, and an emergency fund stays within reach. The interest is low, so people usually look to other products to grow their money.
Say Tanvir has just started his first job. He opens a savings account: his salary is paid into it, he spends with his card, and he leaves Tk 2,000 a month untouched for emergencies. When his mother suddenly falls ill, he can withdraw that money the same day, with no term to wait out.
How it works
When you keep money in a savings account, the bank pays interest on the balance. Interest is usually worked out on your daily or monthly balance and added to the account every three or six months. The exact method differs from bank to bank.
Unlike an FDR, the rate is not fixed in advance; the bank can change it at any time. Many banks limit how many withdrawals you can make in a week or month, and going over the limit can reduce or cancel that month’s interest.
A current account is usually for businesses and frequent transactions, and pays little or no interest. A savings account is meant for individuals: the money stays within reach and still earns a little.
Keeping a balance of Tk 50,000 all year at 3% a year earns Tk 1,500. After 10% tax at source, you receive Tk 1,350. If inflation that year is 9%, the money loses buying power worth about Tk 4,500. The rates are only examples.
Common variations
- Standard savings account
- Most people’s first bank account; the minimum balance and charges vary by bank.
- Tk 10/50/100 accounts
- Accounts promoted by Bangladesh Bank since around 2010 for farmers, the very poor, social-safety-net recipients, garment workers and others on the margins. They open with a tiny deposit and usually carry no minimum balance or maintenance charge.
- School banking and student accounts
- Students under 18 can open an account with a parent or guardian for a very small sum (around Tk 100). Many banks also offer university students accounts with a low minimum balance.
- Mudaraba savings account
- The Islamic bank version: profit-sharing instead of interest, with a provisional rate that is finalised later.
- High-balance or special savings accounts
- Accounts paying a higher rate in steps as the balance grows; sometimes sold under separate names for women, senior citizens or salary earners.
Is money in a mobile wallet savings?
Money in a mobile financial services (MFS) wallet is legally e-money, not a bank savings account. Providers keep an equal amount in separate trust-cum-settlement accounts at banks, but wallet holders generally earn no interest on the balance.
Many apps now offer a DPS or savings option. These are really products of a partner bank or finance company, with the app acting only as the channel. Find out which institution holds the money; your protection and risk depend on that institution.
How protected your money is
Money in a savings account is also a deposit with the bank. If a bank is closed, under the Deposit Protection Act 2026 (which replaced the 2025 ordinance) each depositor should get back up to Tk 2 lakh, counting all their accounts at that bank together. The limit is reviewed every three years.
What return to expect
Savings account rates are usually far below FDR or DPS rates. Figures based on Bangladesh Bank data put the average savings rate just under 3% in 2022–2023. After interest rates were left to the market in 2024, some banks raised their rates, especially on high-balance accounts.
The rate is lowest on small balances, and after charges there may be almost nothing left. A large sum left in a savings account for years loses buying power to inflation.
Why people choose it
- You can withdraw at any time, which suits an emergency fund.
- It can be opened with very little money, and Tk 10 accounts exist for people on low incomes.
- It is the hub where salary, allowances, remittances and interest from other savings are paid in.
- It is covered by deposit protection.
Points to weigh
- The rate is low, often well below inflation.
- The bank can cut the rate at any time.
- Maintenance charges, card fees and excise duty can eat up the small return.
- Because the money is within easy reach, it is also easier to spend.
Tax
The bank deducts tax at source when it pays interest or profit. Under the Income Tax Act 2023, in recent years this has been 10% if you have a TIN and 15% if you do not; the annual Finance Act can change these rates.
If the balance crosses a threshold at any point in the year, excise duty is deducted. Recent budgets have raised the duty-free threshold to a few lakh taka; the threshold and slabs are set in the Finance Act and change.
Banks may also deduct an account maintenance charge once or twice a year. Since 2019, Bangladesh Bank rules have exempted accounts with an average balance up to Tk 10,000; the rules can change.
Tax rules can change with each year’s Finance Act. Before a big decision, check the latest rules or speak to a tax adviser.
How to get started
- Choose a bank branch or agent banking outlet near home or work; many banks also let you open an account in their app (e-KYC).
- Documents: national ID card, photographs, your nominee’s ID and photograph; for students, an institution ID and parent or guardian details.
- Get the minimum balance, charges, card fees and withdrawal limits in writing.
- Ask what balance the interest is calculated on and how often it is paid.
- Switch on SMS alerts so you see every transaction.
Check before you start
- Do I really need this money within reach, or could it go into a fixed-term saving?
- After charges, how much interest will I actually earn on my balance?
- How many withdrawals are allowed each month, and what happens if I make more?
- If I save through a mobile app, do I know which bank or institution holds the money?
- Does my total at this one bank exceed the deposit protection limit?
- Is a nominee properly recorded?