Evolving economic conditions are forcing the central bank to cut repo and reverse repo rates 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 months of 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 in 2023
#1. RBL Savings Account Interest Rate
RBL Bank is giving the highest interest rate on the high-balance savings account. Accounts with a balance in the range of Rs. 10 lakh up to Rs. 3 crores can get a 6.25% interest rate.
RBL Bank offers a 4.25% interest rate on savings amounts up to Rs. 1 lakh which is still better than the FD Interest rates of some major banks like SBI.
RBL Bank savings account interest rate – 5.50% (above Rs. 1 lakh)
Let’s look at other interest rates offered by RBL Bank.
| Savings Bank balance | Interest Rate |
| Rs.10 lakh up to Rs. 3 crore (or above) | 6.25% |
| Rs. 1 lakh up to Rs. 10 lakh | 5.50% |
| Up to Rs. 1 lakh | 4.25% |
#2. Bandhan Bank Savings Account Interest Rate
Bandhan Bank is also giving better interest rates than other banks’ fixed deposits interest offers.
Bandhan Bank savings account interest rate – 5% (above 1 lakh to 10 lakh balance)
You get 4 different interest rate options depending on your bank balance. Interest rate slab of Bandhan Bank:
| Savings Bank balance | Interest Rate |
| Rs. 2 crore up to 10 crore | 5.00% |
| Rs. 10 lakh up to Rs. 2 crore | 6.00% |
| Rs. 1 lakh up to Rs. 10 lakh | 5.00% |
| Up to Rs. 1 lakh | 3.00% |
#3. Yes Bank Savings Account Interest Rate
Yes Bank is providing 4.25% interest on saving above Rs. 1 lakh up to Rs. 10 lakh.
Yes Bank savings account interest rate – 6%
| Savings Bank balance | Interest Rate |
| Rs. 1 crore up to Rs. 25 crore | 5.00% |
| Rs. 10 lakh to Rs. 1 crore | 4.75% |
| Rs. 1 lakh to Rs. 10 lakh | 4.25% |
| Up to Rs.1 lakh | 4.00% |
#4. IndusInd Savings Account Interest Rate
Next is IndusInd Bank which gives better interest earnings on the deposited amount.
IndusInd Bank savings account interest rate – 4%
The interest rate details are as below.
| Savings Bank balance | Interest Rate |
| Above Rs. 10 Lakh | 5.00% |
| Up to Rs. 10 lakh | 4.00% |
#5. 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 – 4.50% (above 1 lakh)
IDFC bank account interest rates are as below.
| Savings Bank balance | Interest Rate |
| Rs. 10 Lakh to < 100 Cr | 5.00% |
| Rs. 1 lakh to < 10 Lakh | 4.50% |
| Up to Rs. 1 lakh | 4.00% |
Also read – How bank calculates different types of interest rates.
Let’s have a look at other banks’ interest rates.
Savings Bank Interest Rate in India 2023
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 reduced savings interest rates further to 2.70% from 2.75% in 2020.
SBI savings account interest rate – 2.70%.
#7. Kotak Mahindra Savings Account Interest Rate
Kotak Mahindra Bank is getting popular for its banking facilities. They used to provide good interest rates on savings accounts but in the past 2 years, they have reduced the savings account interest rates.
Kotak Mahindra Bank savings account interest rate – 3.50%
#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 – 3.00%
The bank offers 2 slabs of interest on the savings account.
| Savings Bank balance | Interest Rates |
| Rs. 50 lakh up to Rs. 500 crore | 3.50% |
| Below Rs 50 lakh | 3.00% |
#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 – 3.00%
ICICI Bank offers two slabs of interest on the savings account.
| Savings Bank balance | Interest Rates |
| Rs. 50 lakh and above | 3.50% |
| Below Rs 50 lakh | 3.00% |
Also read – INDMoney Review (US stock investment made easy)
#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 – 3.00%
| Savings Bank balance | Interest Rate |
| Rs. 50 lakh up to Rs. 10 crore | 3.50% |
| Less than Rs. 50 lakh | 3.00% |
#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 parts of India.
PNB savings account interest rate – 3.50%
| Savings Bank Balance | Interest Rate |
| Above Rs. 50 lakhs | 3.50% |
| Up to Rs. 50 lakh | 3.00% |
#13. Bank of Baroda Savings Account Interest Rate
| Savings Bank Balance | Interest Rate |
| Above Rs. 1 lakh | 2.75% |
| Up to Rs. 1 lakh | 2.75% |
#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 Balance | Interest Rate |
| Above Rs. 25 lakh | 3.75% |
| Up to Rs. 25 lakh | 3.50% |
#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%.
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.
| Bank | Interest Rate |
| RBL Bank | 4.25% – 6.25% |
| Bandhan Bank | 3.00% – 6.00% |
| IDFC Bank | 4.00% – 5.00% |
| IndusInd Bank | 4.00% – 5.00% |
| Yes Bank | 4.00% – 5.00% |
| Kotak Mahindra Bank | 4.00% – 5.00% |
| HDFC Bank | 3.00% – 3.50% |
| ICICI Bank | 3.00% – 3.50% |
| Axis Bank | 3.00% – 3.50% |
| Punjab National Bank | 3.00% – 3.50% |
| Bank of Baroda | 2.75% |
| Indian Overseas Bank | 3.50% – 3.75% |
| State Bank of India | 2.75% |
| Andhra Bank | 3.00% |
| Karur Vysya Bank | 4.00% |
| DCB Bank | 3.25% |
| 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.
