Savings Account Interest Rates

as of 2026-09-01 · IDFC FIRST Bank published savings rate card · verified

Savings account interest rates, read from each bank’s own rate card

Read on 6 September 2026 from each bank’s own published rate page, cited below. Every slab is progressive: the rate applies to the money inside that band, not to the whole balance. Banks may revise savings rates on any day, without notice.

What ₹5 lakh actually earns in a year

Credsir calculation on the published slabs above. Simple interest on a balance held flat for twelve months, before tax and before compounding. Your real figure will differ because the balance moves every day.

Which bank pays the highest savings account interest rate?

IDFC FIRST Bank pays the most on the rate cards we checked. Its top slab is 7.00% a year. RBL Bank tops out at 6.00%. The high rates sit on high slabs, which is where the catch lives.

Why “up to 7%” is not the rate you get

Both IDFC FIRST and RBL price in progressive slabs. The rate applies only to the money inside that band. At IDFC FIRST, your first ₹3 lakh earns 2.50%. Only the money above ₹3 lakh earns 7.00%.

So a ₹5 lakh balance earns a blended 4.30%, not 7%. A ₹1 lakh balance earns 2.50%, exactly what SBI pays. The advertised number is a ceiling, not an offer.

Why do the big banks only pay 2.50%?

Because they can. The RBI deregulated savings rates. Under the Master Direction on interest rates on deposits, each bank sets its own rate. One rule binds it: the rate must be uniform on balances up to ₹1 lakh. Above ₹1 lakh, a bank may offer differential rates.

SBI, HDFC Bank and ICICI Bank already hold enormous cheap deposits. They do not need to buy your money.

Smaller banks do. A 7% savings slab is a marketing cost, paid to win deposits from a leader.

The uncomfortable part: the RBI repo rate is 5.25%. A 2.50% savings account pays you less than half of that. Money sitting in a large-bank savings account is losing ground quietly.

Is it worth switching banks for a higher savings rate?

Do the arithmetic on your own balance. On ₹5 lakh held all year, IDFC FIRST pays ₹21,500 against SBI’s ₹12,500. That is ₹9,000 more.

On ₹1 lakh, the difference is nil. Both pay 2.50%. Opening an account, moving mandates and updating auto-debits is not worth zero.

The honest test is simple. If you keep a large idle balance for months at a time, switching pays. If your account empties every month, it does not.

What you give up when you chase the rate

Higher-rate accounts usually carry a higher minimum balance requirement, and a penalty when you fall below it. Check that number before you open the account, not after. If the minimum is the obstacle, a zero-balance savings account removes it entirely.

Should the money be in a savings account at all?

Often, no. RBL Bank pays 6.00% on its top savings slab. The same bank pays 7.20% on a fixed deposit of 18 to 36 months. You lose over a percentage point for the right to withdraw on demand.

Small finance banks go further, paying around 8.00% on term deposits.

A savings account is a liquidity product, not an investment. Keep your emergency fund and one or two months of spending in it. Move the rest to a deposit, or to a sweep-in facility that converts surplus balance to an FD automatically. The FD maturity calculator shows what that switch is worth on your own balance.

How is savings account interest calculated and taxed?

Daily balance, but not always monthly credit

The RBI requires interest on savings deposits to be calculated on a daily product basis. That means your end-of-day balance, every day. It must be credited at quarterly or shorter intervals.

Banks differ on how often they pay. IDFC FIRST and RBL credit monthly. SBI, HDFC Bank and ICICI Bank credit quarterly. Monthly credit compounds faster, so it is worth a little more at the same headline rate.

What tax you pay on the interest

Savings interest is taxable. Section 80TTA allows a deduction of up to ₹10,000 for people under 60. Section 80TTB allows ₹50,000 for resident senior citizens.

The Income Tax Department lists both under deductions available only in the old tax regime. The new regime has been the default since AY 2024-25. If you have not opted out, you get no deduction at all on this interest.

How safe is money in a high-rate savings account?

Deposit insurance covers ₹5 lakh per depositor per bank. That figure includes principal and interest together, and savings accounts are covered.

This matters most to the people chasing 7%. To earn that slab at IDFC FIRST you must hold more than ₹3 lakh. Push past ₹5 lakh at one bank and the excess is uninsured.

The fix is boring. Split large balances across two banks.