Automatic detection and classification of life-threatening arrhythmia plays an important part in dealing with various cardiac conditions. In this paper, a novel method for classification of various types of arrhythmia using morphological and dynamic features is presented. Discrete wavelet transform (DWT) is applied on each heart beat to obtain the morphological features. It provides better time and frequency resolution of the electrocardiogram (ECG) signal, which helps in decoding important information of a quasiperiodic ECG using variable window sizes. RR interval information is used as a dynamic feature. The nonlinear dynamics of RR interval are captured using Teager energy operator, which improves the arrhythmia classification. Moreover, to remove redundancy, DWT subbands are subjected to dimensionality reduction using independent component analysis, and a total of twelve coefficients are selected as morphological features. These hybrid features are combined and fed to a neural network to classify arrhythmia. The proposed algorithm has been tested over MIT-BIH arrhythmia database using 13724 beats and MIT-BIH supraventricular arrhythmia database using 22151 beats. The proposed methodology resulted in an improved average accuracy of 99.75% and 99.84% for class- and subject-oriented scheme, respectively, using three-fold cross validation.