Savings Account Interest Rates in India 2020
SAVING ACCOUNT INTEREST RATE INDIA

Savings Account Interest Rates in India 2020

Evolving economic conditions are forcing the central bank to cut repo and reverse repo rate to enable easy lending. Banks are cutting lending rates, but reducing the interest rates on deposits as well. 

The trend of declining interest rates isn’t new, banks reduced interest rates in the range of 1.25% to 2% in the last 3 years or so.  

Ideally,  the main purpose of a savings account should be to keep the money in a liquid state for regular use.  The excess money should be invested in higher return investment options. 

Financial experts suggest that one should keep a maximum of 3 month expenses in a savings account. 

Let’s check the savings account interest rates of all the banks in India.

Which Bank Gives Highest Interest Rate on Saving Account Now

#1. IDFC Bank Savings Account Interest Rate

IDFC  Bank is currently at the top in providing the highest interest rate  on your savings account. 

IDFC savings account interest rate – 7%

IDFC bank account interest rates are as below.

Savings Bank balanceInterest Rate
Above Rs. 1 lakh7.00%
Up to Rs. 1 lakh6.00%

#2. Bandhan Bank Savings Account Interest Rate

Bandhan  Bank is giving the highest interest rate on the high balance savings account.  Accounts with over Rs. 50 crore balance can get 7.15% interest rate.

Bandhan Bank savings account interest rate – 6% (above 1 lakh balance)

You get 4 different interest rate options depending on your bank balance. Interest rate slab of Bandhan Bank: 

Savings Bank balanceInterest Rate (Revised on 21 March 2020)
Above Rs. 50 crore7.15%
Rs. 10 crore up to Rs. 50 crore6.55%
Rs. 1 lakh up to Rs. 10 crore6.00%
Up to Rs. 1 lakh4.00%

#3. RBL Savings Account Interest Rate

RBL  Bank is also giving better interest rates than other bank’s fixed deposits interest offers.

RBL Bank savings account interest rate – 6% (above Rs. 1 lakh)

Let’s look at other interest rates offered by RBL Bank.

Savings Bank balanceInterest Rate (Revised on October 01, 2019)
Rs.10 lakh up to Rs. 3 crore6.75%
Rs. 1 lakh up to Rs. 10 lakh6.00%
Up to Rs. 1 lakh5.00%

#4. IndusInd Savings Account Interest Rate

Next is IndusInd  Bank that gives better interest earnings on the deposited amount. 

IndusInd  Bank savings account interest rate – 5%

The interest rates details are as below.

Savings Bank balanceInterest Rate (Revised on 21 March 2020)
Above Rs.10 Lakh6.00%
Rs. 1 lakh up to Rs. 10 lakh5.00%
Up to Rs. 1 lakh4.00%

#5. Yes Bank Savings Account Interest Rate

Yes  Bank is providing 6% interest on saving above Rs. 1 lakh  up to Rs. 1 crore.  

Yes Bank savings account interest rate – 6%

Savings Bank balanceInterest Rate
Rs. 1 crore up to Rs. 100 crore6.25%
Rs. 1 lakh to Rs. 1 crore6.00%
Up to Rs.1 lakh5.00%

Also read – How bank calculate different types of interest rates.

Let’s have a look at other bank’s interest rates.

Savings Bank Interest Rate in India 

I have curated a list of popular banks providing better  interest rates on savings accounts.

#6. State Bank of India Savings Account Interest Rate

The largest and most trusted bank in India offers the lowest rates. SBI has recently reduced savings interest rates by 25 bps  to 2.75% from 3.00%.

SBI savings account interest rate – 2.75%.

#7. Kotak Mahindra Savings Account Interest Rate

Kotak Mahindra Bank is getting popular for its banking facilities. They are also providing good interest rates on savings accounts as well.

Kotak Mahindra  Bank savings account interest rate – 5%

You get 2 interest options with  Kotak Mahindra Bank.

Savings Bank balanceInterest Rate (Revised on 01 January 2020)
Above Rs. 1 lakh 5.00%
Up to Rs.1 lakh4.00%

#8. Karur Vysya Bank Savings Account Interest Rate

Karur Vysya Bank is a leading bank of South India. Karur Vysya is one of the oldest banks in India. Karur Vysya was established in 1916. But, if you see  the interest rates on savings accounts then it is relatively low compared to other banks.

Karur Vysya Bank savings account interest rate – 2.75%

#9. HDFC Savings Account Interest Rate

HDFC  Bank is one of the most popular private banks in India. The bank  has around 6,000 branches in around 2800 cities across the country. 

HDFC Bank savings account interest rate – 3.50%

The bank  offers two slabs of  interest on the savings account.

Savings Bank balanceInterest Rates (Revised as on 7th January 2019)
Rs. 50 lakh up to  Rs. 500 crore4.00%
Below Rs 50 lakh3.50%

#10. ICICI Savings Account Interest Rate

ICICI Bank is another  popular bank in India, known for speedy technological adaptation.  If you want world-class tech-enabled banking services then ICICI Bank is a better choice for you in India. 

ICICI Bank has recently reduced its savings account interest rates.

ICICI  Bank savings account interest rate – 3.25%

ICICI Bank offers two slabs of  interests on the savings account.

Savings Bank balanceInterest Rates (Revised as on 9th April 2020)
Rs. 50 lakh and above3.75%
Below Rs 50 lakh3.25%

#11. Axis Savings Account Interest Rate

Axis  Bank offers almost similar interest rates as offered by HDFC  Bank and it is still better than many other banks in India.

Axis Bank savings account interest rate – 3.50%

Savings Bank balanceInterest Rate (Revised on 01 January 2020)
Rs. 50 lakh up to Rs. 10 crore4.00%
Less than Rs. 50 lakh3.50%

#12. PNB Savings Account Interest Rate

Punjab National Bank has a good banking network across India, especially in rural areas. Established in 1894, PNB has captured almost all the parts of India. 

PNB savings account interest rate – 3.50%

Savings Bank BalanceInterest Rate
Above Rs. 50 lakhs3.75%
Up to Rs. 50 lakh3.50%

#13.Bank of Baroda Savings Account Interest Rate

Bank of Baroda offers two interest rate slabs.

Savings Bank BalanceInterest Rate
Above Rs. 1 lakh3.00%
Up to Rs. 1 lakh3.25%

#14. Indian Overseas Bank Savings Account Interest Rate

Indian Overseas  Bank offers interest rates similar to its counterparts. 

IOB savings account interest rate – 3.50%

Savings Bank BalanceInterest Rate
Above Rs. 25 lakh3.75%
Up to Rs. 25 lakh3.50%

#15. Andhra  Bank Savings Account Interest Rate

Andhra Bank is among those banks in India that offer around interest below 4%.

Andhra  Bank savings account interest rate – 3.00%

#16. Post Office Savings Account Interest Rate

You can’t miss the Post  Office saving account because of its huge popularity, vast network, and of course the high interest rates. 

The  Post Office still offers better interest rates than other nationalized banks.

Indian Post Office savings account interest rate – 4.00%.

Also readEPF interest rate

Bank Savings Account Comparison

I have created a comparison table for your ease. You can compare all the popular banks to decide which bank is more beneficial.

BankInterest Rate
IDFC Bank6.00% – 7.00%
Bandhan Bank4.00% – 6.00%
RBL Bank5.00% – 6.75%
IndusInd Bank4.00% – 6.00%
Yes Bank5.00% – 6.00%
Kotak Mahindra Bank4.00% – 5.00%
HDFC Bank3.50% – 4.00%
ICICI Bank3.25% – 3.75%
Axis Bank3.50% – 4.00%
Punjab National Bank3.50% – 3.75%
Bank of Baroda3.25% – 3.00%
Indian Overseas Bank3.50% – 3.75%
State Bank of India2.75%
Andhra Bank3.00%
Karur Vysya Bank4.00%
DCB Bank3.25%
Indian Post Office 4.00%

How Banks Calculate Savings Account Interest Rate

Formula to calculate savings account interest is as below-

Interest = Daily balance * rate of interest * (no. of days/365)

For example,

Amit has maintained Rs. 1,00,000 balance in his savings account for six months and the rate of interest he is earning is 5%. Let’s calculate the interest earned by Amit.

Interest earned = 1,00,000 * 5 * (180/365) = Rs. 2,465.75

FAQ

#1. What are the different types of savings accounts?

Different savings accounts are- 

  • Individual Account – Any person can open this savings account in any of the banks.
  • Joint Account – More than one account holder can operate a single account. Mostly 2 account holders open a joint account but some banks allow up to 4 joint holders as well.
  • Woman’s Account – Only female account holders. Some banks offer special benefits and interest rates for women.
  • Senior Citizens Account – Savings account for a person above 60 years of age. You get some fee waivers and special rates offered against such accounts.
  • Minors Account – Some banks allow the minor child as a second holder of the account, while the parent or guardian is the primary one. 
  • Salary Account – An account opened by the employer for their employees to transfer salaries. An individual gets zero balance along with other savings account benefits.

#2. When is the interest earned on my savings account credited?

Interest earned on your  savings account balance is credited to your account on a half-yearly basis. 

#3. What are the charges for requesting a copy of my bank statement?

You can get bank statements free of cost using net banking. However, the bank may charge for the bank statement more than 90 days old. Banks normally charge up to Rs. 100 for a copy of your bank statement. 

#4. What are the documents required to open a  savings account?

I have curated a list of documents required to open a savings account. However, the documents may vary from bank to bank.

Identity and residence proofs are as below.

  • Passport
  • Voter’s ID
  • Aadhaar Card
  • Driving license
  • Electricity/water/telephone/ gas bill
  • Property tax bill
  • Domicile certificate with address 
  • Government employee ID card
  • Defense ID card
  • NREGA Job  card
  • Registered rent/lease agreement
  • Society outgoing bill (only from registered societies)

#5. Are there any charges for cheque books and ATM cards?

You mostly get one free checkbook of 10-20 leaves every quarter, however, that varies  from one bank to bank. 

ATM cards come with a yearly fee but that is waived off if you use it for the desired amount throughout the year.

Conclusion

Banks are reducing interest rates day-by-day. Only a few banks are paying decent interest on your savings account. 

It’s better to diversify your money in different ways to get better returns.

Which bank do you have your savings account and how much interest are you getting, do let me know in the comments.

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