Best Savings Account Interest Rates India 2026 — All Banks Compared
SBI gives 2.7%. IDFC First gives 7.25%. Same RBI regulation, same DICGC protection — but 2.5x the interest. Here's which bank is worth your money in 2026.
Best Savings Account Interest Rates India 2026 — All Banks Compared
Best Savings Account Interest Rates India 2026 — Quick Answer
| Bank | Interest Rate | Type | Min Balance |
|---|---|---|---|
| IDFC First Bank | 7.25% (above ₹10L) | Private | ₹10,000 |
| RBL Bank | 7.50% (above ₹10L) | Private | ₹5,000 |
| YES Bank | 7.00% (above ₹10L) | Private | ₹10,000 |
| Equitas SFB | 7.00% (above ₹1L) | Small Finance | Zero balance |
| HDFC Bank | 3.5% (below ₹50L) | Private | ₹10,000 |
| SBI | 2.70% | PSU | ₹1,000 (urban) |
Note: Higher interest rates from smaller private banks come with the same DICGC insurance (₹5 lakh per depositor) as SBI. For balances under ₹5 lakh, switching to a higher-rate bank is safe and worth doing.
Here's something most people don't realise: keeping ₹1 lakh in an SBI savings account earns you ₹2,700/year. Keeping the same ₹1 lakh in IDFC First Bank earns ₹7,250/year — nearly 2.7x more — with the same DICGC protection for amounts up to ₹5 lakh.
The difference is significant. Over 10 years, compounded, that gap becomes ₹38,000 vs ₹1,03,000 in interest — for doing nothing differently except choosing the right bank. This guide has all the rates, all the conditions, and a clear verdict on which account is worth opening.
📋 Table of Contents
- Best Savings Account Rates 2026 — All Banks
- Interest Calculator — How Much Will You Earn?
- Small Finance Banks — High Rates, Same Protection
- Best Zero Balance Savings Accounts 2026
- Types of Savings Accounts
- Tax on Savings Account Interest
- How to Choose the Best Savings Account
- Savings Account vs FD — When to Choose What
- Frequently Asked Questions
Best Savings Account Interest Rates India 2026 — All Banks
Savings Account Interest Rates — PSU Banks India 2026
- SBI (State Bank of India): 2.70% p.a. on all balances
- Bank of Baroda: 2.75% (up to ₹10L), 3.35% (above ₹10L)
- Punjab National Bank: 2.70% (up to ₹10L), 3.00% (above ₹10L)
- Canara Bank: 2.90% (up to ₹50L), 3.25% (above ₹50L)
- Bank of India: 2.75% (up to ₹10L), 2.90% (above ₹10L)
- Union Bank of India: 2.75% (up to ₹10L), 3.00% (above ₹10L)
PSU Banks — Rates Summary
| Bank | Rate (up to ₹10L) | Rate (above ₹10L) | Min Balance (Urban) |
|---|---|---|---|
| SBI | 2.70% | 2.70% | ₹1,000 (MAB) |
| Bank of Baroda | 2.75% | 3.35% | ₹2,000 (MAB) |
| Punjab National Bank | 2.70% | 3.00% | ₹1,000 (MAB) |
| Canara Bank | 2.90% | 3.25% | ₹1,000 (MAB) |
| Bank of India | 2.75% | 2.90% | ₹500 (rural) |
| Union Bank of India | 2.75% | 3.00% | ₹2,000 (MAB) |
| Indian Bank | 2.75% | 3.00% | ₹1,000 (MAB) |
| Post Office Savings | 4.00% | 4.00% | ₹500 |
Private Banks — Rates Summary
| Bank | Rate (standard) | Rate (high balance) | High Balance Threshold | Min Balance |
|---|---|---|---|---|
| RBL Bank | 5.00% | 7.50% | Above ₹10 lakh | ₹5,000 |
| IDFC First Bank | 6.00% | 7.25% | Above ₹10 lakh | ₹10,000 |
| YES Bank | 5.00% | 7.00% | Above ₹10 lakh | ₹10,000 |
| IndusInd Bank | 4.00% | 6.00% | Above ₹1 lakh | ₹10,000 |
| Kotak Mahindra Bank | 3.50% | 4.00% | Above ₹50L | ₹10,000 |
| HDFC Bank | 3.50% | 3.50% | — | ₹10,000 |
| ICICI Bank | 3.00% | 3.50% | Above ₹50L | ₹10,000 |
| Axis Bank | 3.50% | 3.50% | — | ₹10,000 |
Small Finance Banks — Highest Rates
| Bank | Rate (standard) | Rate (high balance) | Zero Balance? | Min Balance |
|---|---|---|---|---|
| Suryoday SFB | 5.00% | 7.25% | ✅ Yes | Zero |
| Unity SFB | 5.00% | 7.50% | ✅ Yes | Zero |
| Equitas SFB | 4.00% | 7.00% | ✅ Yes | Zero |
| ESAF SFB | 4.00% | 6.50% | ✅ Yes | Zero |
| Jana SFB | 4.50% | 7.00% | Partial | ₹2,000 |
| North East SFB | 5.00% | 7.25% | ✅ Yes | Zero |
| AU SFB | 3.50% | 7.00% | No | ₹2,500 |
Top 6 Savings Accounts by Interest Rate — 2026
Interest Calculator — How Much Will You Earn?
Small Finance Banks — High Rates, Same DICGC Protection
Are Small Finance Banks Safe for Savings Accounts?
Yes — Small Finance Banks (SFBs) are regulated by the Reserve Bank of India under the Banking Regulation Act. Your deposits up to ₹5 lakh per depositor per bank are insured by DICGC (Deposit Insurance and Credit Guarantee Corporation) — the same insurance that covers SBI and HDFC Bank deposits.
- All SFBs are RBI-licensed — they cannot operate without RBI approval
- DICGC covers ₹5 lakh per bank — if you have ₹10 lakh, split across two banks for full protection
- SFBs have maintained strong financial metrics since their licensing in 2016–17
- The higher interest rate reflects their business model (micro-lending at higher rates) — not higher risk for depositors
Practical advice: For balances up to ₹5 lakh — an SFB account at 7–7.5% is as safe as SBI at 2.7%. The extra ₹4,000–5,000/year in interest is essentially free money.
💡 How to Use SFB Accounts Smartly
- Keep your primary salary account at a large private bank (HDFC, ICICI, Axis) for convenience, app quality, and card benefits
- Open a second savings account at Equitas SFB, IDFC First, or Unity SFB for your emergency fund and savings buffer
- Transfer excess balance (above 1–2 months expenses) to the high-interest account monthly
- Keep each bank balance under ₹5 lakh for full DICGC coverage
- This two-account strategy takes 30 minutes to set up and earns ₹3,000–5,000/year more interest on a ₹1 lakh average balance — for zero extra effort
Best Zero Balance Savings Accounts 2026
Best Zero Balance Savings Accounts with High Interest Rates India 2026
- Unity Small Finance Bank: 7.50% (above ₹5L), 5.00% (standard) — zero balance, full digital
- Equitas Small Finance Bank: 7.00% (above ₹1L), 4.00% (standard) — zero balance, strong app
- ESAF Small Finance Bank: 6.50% (above ₹1L) — zero balance
- Suryoday SFB: 7.25% (above ₹1L) — zero balance
- IDFC First Bank: 7.25% (above ₹10L), 6.00% (standard) — ₹0 minimum balance on digital account
- Kotak 811: 3.50% — zero balance digital account, Kotak brand, strong app
- HDFC Bank Basic Savings: 3.50% — zero balance, HDFC reliability
| Bank | Account Name | Rate | Min Balance | Best Feature |
|---|---|---|---|---|
| Unity SFB | Digital Savings Account | 7.50% (above ₹5L) | Zero | Highest interest + zero balance |
| Equitas SFB | Future First Savings | 7.00% (above ₹1L) | Zero | Strong app, easy KYC |
| IDFC First Bank | Future FIRST Savings | 7.25% (above ₹10L) | Zero (digital) | Best private bank rate + zero balance |
| Suryoday SFB | Regular Savings | 7.25% (above ₹1L) | Zero | Good interest, simple process |
| Kotak 811 | Kotak 811 | 3.50% | Zero | Kotak brand, excellent app |
| HDFC Bank BSBD | Basic Savings Bank Deposit | 3.50% | Zero | HDFC reliability, wide ATM network |
| Paytm Payments Bank | Paytm Savings | 2.50% | Zero | Instant account, Paytm integration |
Types of Savings Accounts in India
Regular Savings Account
Standard savings account. MAB (Minimum Average Balance) required. Interest credited quarterly. Most common for salaried and self-employed. Choose based on interest rate and app quality.
Zero Balance / Basic Savings
No minimum balance requirement. Includes BSBD accounts (Basic Savings Bank Deposit) — limited transactions per month. SFBs offer zero balance with high interest.
Salary Account
Employer-linked account. Zero balance maintained while employed. Standard rates usually (HDFC, ICICI, Axis for corporates). Converts to regular if salary stops for 3 months.
Senior Citizen Account
Tax on Savings Account Interest — Section 80TTA and 80TTB
Is Savings Account Interest Taxable in India 2026?
- Section 80TTA (below 60 years): Interest from savings account up to ₹10,000/year is tax-exempt. Interest above ₹10,000 is added to income and taxed at slab rate.
- Section 80TTB (senior citizens, 60+ years): Interest from savings account + FD + RD up to ₹50,000/year is tax-exempt.
- TDS on savings account: Banks do NOT deduct TDS on savings account interest — unlike FD. But you must declare it in your ITR.
- Calculate your tax: On ₹1 lakh at 7% = ₹7,000 interest. Below-60 taxpayer: first ₹10,000 exempt, remaining taxed at slab. Net tax burden is low.
Unlike FD interest (where TDS is deducted by the bank if interest exceeds ₹40,000/year), savings account interest has no TDS. However, you must declare all savings account interest in your ITR under "Income from Other Sources." With the Section 80TTA deduction, most individuals with savings accounts earn well under the ₹10,000 exemption limit. When you file your ITR, the ITR filing guide covers exactly where to declare this under Schedule OS.
How to Choose the Best Savings Account in 2026
How to Choose Best Savings Account in India 2026
- Interest rate: IDFC First (7.25%), RBL (7.50%), Unity SFB (7.50%) beat large banks by 3–4%
- Safety: All RBI-licensed banks have DICGC cover up to ₹5 lakh — don't pay a safety premium for SBI rates
- App quality and UX: IDFC First, Kotak 811, HDFC Bank have the best mobile banking apps
- ATM network: HDFC, SBI, ICICI have widest ATM presence — important if you withdraw cash frequently
- Minimum balance: Check MAB penalties — missing minimum balance triggers ₹250–500/month charges
- Your use case: Emergency fund → highest rate SFB. Daily transactions → large private bank. Salary → employer's preferred bank.
⚠️ Minimum Average Balance (MAB) Penalty — Don't Get Caught
If your average balance falls below the required MAB, banks charge a penalty — typically ₹250–600/month depending on the shortfall. HDFC Bank charges up to ₹600/month. ICICI charges ₹500/month. Over a year, MAB penalties can exceed the interest you earn. Either choose a zero-balance account or always maintain the required average. Check the MAB requirement and penalty before opening an account — it's in the account opening form fine print.
Savings Account vs Fixed Deposit — When to Choose What
Savings account interest (2.7–7.5%) vs FD interest (6.8–8.5%) — for the same bank. When should you keep money in a savings account vs move it to an FD?
| Factor | Savings Account | Fixed Deposit | Choose Based On |
|---|---|---|---|
| Liquidity | Instant — withdraw anytime | Lock-in — penalty on early exit | Need money within 3 months → Savings |
| Interest Rate | 2.7–7.5% | 6.8–8.5% (higher) | FD typically 0.5–2% more than savings |
| Minimum amount | ₹500–10,000 (MAB) | ₹1,000 | Small surplus → savings; large → FD |
| Tax treatment | 80TTA: ₹10K exempt | TDS if >₹40K/year interest | Similar tax — no major advantage |
| Best use case | Emergency fund, monthly expenses, transactions | 3–12 month lump sum parking | Emergency fund → savings; surplus → FD |
✅ Smart Money Management Strategy
- Current expenses (1 month): Primary savings account (HDFC/ICICI/Axis) for convenience
- Emergency fund (3–6 months expenses): High-interest savings account (IDFC First or Equitas SFB) — liquid and earning well
- Short-term savings (3–12 months): Fixed Deposit — slightly higher rate, acceptable lock-in for this horizon
- Long-term wealth (5+ years): Equity mutual funds via SIP — significantly better returns than any bank account
For a deeper comparison of FD vs RD rates across banks, see our FD vs RD guide. And for your long-term savings beyond the emergency fund, our PPF vs Mutual Fund and NPS vs PPF guides cover tax-efficient investment options that far outperform savings accounts over time.
A good savings account with a reputed bank also strengthens your banking relationship — which matters when you apply for credit cards or loans. Banks check your account statements and transaction history alongside your CIBIL score when evaluating loan and credit card applications.
📚 Related Finance Guides on Shoonyas
- Fixed Deposit vs Recurring Deposit 2026 — Better than savings for surplus money
- PPF vs Mutual Fund 2026 — For long-term wealth beyond savings accounts
- NPS vs PPF 2026 — Retirement planning beyond savings
- CIBIL Score 2026 — Bank account history affects loan eligibility
- Best Credit Cards India 2026 — Maximise rewards alongside savings interest
- How to File ITR Online 2026 — Declare savings account interest correctly
Frequently Asked Questions
Switch or Open a Second Account — 30 Minutes, ₹4,000+ Extra per Year
The interest rate gap between India's worst-paying and best-paying savings accounts is 4–5 percentage points. On a ₹1 lakh average balance, that's ₹4,000–5,000 in extra interest every year — for doing nothing except opening the right account.
You don't need to close your SBI or HDFC account. Keep it for salary deposits, UPI transactions, and ATM withdrawals. Simply open a second account at IDFC First Bank or Equitas SFB for your emergency fund and surplus savings. Transfer money across as needed.
That's 30 minutes of paperwork once — for thousands of rupees in additional interest every year, forever.
📌 Disclaimer
Savings account interest rates mentioned are based on publicly available bank data as of May 2026. Rates change frequently — always verify current rates directly on the bank's official website before opening an account. Minimum balance requirements, penalty structures, and account features also vary and may change. This article is for informational purposes only and does not constitute financial advice. Shoonyas.in is not affiliated with any bank or financial institution.