Latest Savings Account Interest Rates of Major Banks

Interest Rates of Savings Account of Major Banks October 2020

Introduction

In this article you will find the Interest Rates of Savings Account provided by major banks in India. These interest rates are as on last updated by the banks respective websites.

Interest Rates of Savings Account of Major Banks October 2020

Effect of RBI’s Key Relief Announcements to address COVID-19 pandemic

• On March 27 and May 22, 2020, Reserve Bank of India (RBI), announced a set of relief measures to address COVID-19 pandemic.
• Since March 27, RBI cumulatively cut benchmark Repo Rate significantly by 115 bps from 5.15% to 4.00%, while Reverse Repo Rate is reduced by a massive 155 bps from 4.90% to 3.35%. RBI reduced Reverse Repo Rate notably in order to motivate banks to pass on the excess liquidity to the borrowers, thus supporting in boosting credit growth.
• RBI infused a fresh liquidity of almost Rs.3.74 Lakh Crore into the banking system. The decision to lower the cash reserve ratio (CRR) by 100 bps has alone unlocked liquidity of Rs.1.37 Lakh Crore.
• Flush with liquidity and faced with limited lending opportunities, banks will be forced to slash deposit rates to protect profitability in a falling interest rate cycle.
• State Bank of India (SBI), the nation’s largest lender, was the first to lower its deposit rates citing excess liquidity.

2 Banks Offering Highest Interest Rates on Savings Account

1. IDFC First Bank

Here, IDFC First Bank provides the highest interest rate on savings account as shown in above table. For the balance up to Rs.1 Lac interest rate is 6%. While it is 7% for the balance above Rs.1 Lac and up to Rs.10 Crore. For the balance above Rs.10 Cr and up to Rs.50 Cr, the interest rate has been reduced to 4.50% from 6.50%.

2. DBS Bank

After IDFC First Bank, Digi bank by DBS (DBS Bank) offers the competitive higher interest rate on savings account. The interest rates are as follows :-

(Balances up to 1 lakh will get 3.5% interest rates. Any balances over and above 1 lakh & up to 2 lakhs will get 5% on the incremental amount, 2 lakhs & up to 50 lakhs will get 3.50%-3.75% on the incremental amount & 4% on the remaining balances). Bank has recently lowered its interest rates on Savings a/c after RBI’s significant cut in policy repo rate.

Other Major Banks

The list of banks below offer the following interest rate :-

Some banks offer the following interest rates on their savings a/c :-

Summary

• We can see that most of the major banks in India offer almost same interest rates. The most basic interest rates offered by the maximum bank ranges around 2.50% to 4%.
• IDFC First Bank and DBS Bank provide the highest interest rates on the balance in your savings a/c. But, these banks have very limited reach. They are only based in metropolitan cities and some other few cities. It is only beneficial to choose IDFC First Bank or DBS Bank if you have a branch near you. Otherwise, opting for another bank would be better as getting services and other advantages from IDFC First Bank or DBS Bank will be an issue.
• After the above mentioned 2 Banks, RBL Bank (formerly  known as The Ratnakar Bank limited) and Yes bank offer higher interest rates on your balance in savings a/c.
• Bandhan Bank, IndusInd Bank as well as Kotak Mahindra Bank also provide high and competitive interest rates on their savings a/c. In comparison with top banks in India, Kotak Mahindra Bank has the widest reach across India. Their branches and ATM’s are spread all over India. It has quite high reachability.