In India, both public and private banks offer all sorts of savings accounts designed to meet different needs. Interest rates usually range from around 2.6% to 8% per year, depending on your account balance and the bank.
Before opening an account, take the time to check the interest rate and features each bank offers. Here’s a snapshot of the best savings account interest rates as of January 2, 2025:
💰 Interest Rates for Balances up to ₹1 Lakh
- Jana Small Finance Bank – 2.5%
- RBL Bank – 3.5%
- Yes Bank – 3.0%
- North East SFB – 6.5%
- Utkarsh SFB – 4.0%
- Suryoday SFB, Fincare, IndusInd, IDFC First – 3.0%
- ESAF SFB – 3.5%
💰 Balances from ₹1 Lakh to ₹5 Lakhs
(Interest applies only to the amount over ₹1 lakh)
- Bandhan – 6.0%
- Equitas, Ujjivan – 5.0%
- DBS – 3.5% (₹1–4L), 7.0% (₹4–5L)
- Jana – 5.0%
- Utkarsh – 6.25%
- RBL – 5.5%
- Yes Bank – 4.0%
- Suryoday – 5.0%
- Fincare – 3.0% (₹1–3L), 4.0% (₹3–5L)
💰 Balances from ₹5 Lakhs to ₹10 Lakhs
- Bandhan – 6.0% (up to ₹10L)
- DBS – 5.0%
- RBL – 5.5% (₹1–10L)
- Jana – 6.5%
- Equitas – 5.0% (₹1–7L), 7.0% (above ₹7L)
- Ujjivan, Suryoday – ~7.25%–7.50%
- Utkarsh – 7.50%
- DCB – 4.75%
- Fincare – 5.0%
💰 Balances from ₹10 Lakhs to ₹1 Crore
- AU SFB – 7.0%
- Jana, ESAF, Utkarsh – 7.5%
- RBL – 6.0% (₹10–25L), 7.5% (above ₹25L)
- Ujjivan, Suryoday – ~7.25%–7.50%
- DCB – 4.75%–7.75% (increasing with balance)
- SBM Bank – 7.0%–7.25% (by bracket)
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💰 Balances Above ₹1 Crore
- Ujjivan – 7.50% (above ₹10L), 7.55% (above ₹1Cr)
- SBM Bank – 7.25%–7.25%
- Bandhan – 7.0%
- ESAF, DCB – 7.5%–8.0%
- Equitas – 7.0%–7.80% (larger deposits)
- Utkarsh, Jana – 7.5%–7.55%
- Yes Bank – 7.0%
- Shivalik SFB – 6.0%
Why a Savings Account Still Wins
While fixed deposits and mutual funds lock in your money, savings accounts offer easy access and steady interest—giving you both flexibility and returns. You can meet short-term goals, save regularly, and even use NBFC accounts (like those for kids, women, or pensioners).
How Interest Is Calculated
- Banks calculate interest daily, based on your closing balance.
- It’s paid either quarterly or half-yearly—RBI now prefers quarterly payouts.
- Example: ₹3 lakh at 4% p.a. earns around ₹986 for a 30-day month.
Taxes on Interest
- Savings interest is taxable income.
- No TDS if it’s from public or private banks (Sec 194A).
- You get a deduction of up to ₹10,000 under section 80TTA.
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Perks of Having a Savings Account
- Safe & secure way to store money.
- Instant access via ATM, NEFT, IMPS, net banking.
- Low entry barrier—start with a small deposit.
- Free banking tools like net and phone banking.
- Some banks even offer built-in insurance.
Minimum Balance Rules
- Banks set a minimum average balance (daily, quarterly, etc.).
- Falling below it can mean penalty fees.
- But there’s also BSBDA—a no-penalty, zero-balance savings account available from most major banks.
Need Help Calculating Interest?
Use an online calculator: enter your average balance, rate, and payout frequency (monthly, quarterly, etc.) to estimate your returns.
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Bottom Line
A savings account is a must-have financial tool—offering interest, flexibility, and security all in one. Compare interest rates, check the fine print, and pick a bank that fits your needs and balance. Keeping an eye on rates—like the ones above—helps you get the most from your money.
