Savings accounts are intended for savings. However, unlike term deposit accounts, they are also intended for transaction convenience, being payable on demand. Banks insist on a certain average minimum balance in such accounts and allow a fairly liberal but restricted number of transactions. RBI has allowed banks to set their own rates on these accounts.
Current and Savings accounts (CASA) are low cost sources of funds. They are also usually the beginning of a relationship with a customer who may then go on to buy or use other high-end services of the bank.