Range of Interest Rates Offered

• Interest rates on savings accounts in India generally range from 2.50% to 7.00% per annum.
• Rates vary depending on the bank’s policy and account type.
• Public sector banks usually offer 2.70% to 3.50% annually.
• Private and small finance banks may offer higher rates, up to 6.50% or more.
• Some digital and niche banks provide competitive interest slabs.

Balance-Based Rate Slabs

• Many banks offer tiered interest rates based on the account balance.
• Lower balances may earn a lower interest rate.
• Higher balances above specified thresholds may attract higher rates.
• The slab structure differs between banks and account categories.
• Rates may change dynamically with monetary policy updates.

Interest Calculation Method

• Interest is calculated daily on the closing balance.
• The accumulated interest is credited quarterly or monthly.
• Compound interest may apply based on the bank’s interest model.
• Daily balance tracking ensures accurate interest payout.
• Customers can track earnings through account statements.

Factors Influencing Interest Rates

• RBI’s repo rate and monetary policy decisions affect deposit rates.
• Banks adjust rates to attract more savings or manage liquidity.
• Competition among banks also influences interest rate offerings.
• Inflation and economic trends may lead to periodic rate revisions.
• Regulatory norms ensure transparency and consistency in rates.

Customer Considerations

• Higher rates may come with specific balance or transaction conditions.
• Promotional rates may be temporary or account-type specific.
• It’s important to compare rates along with service quality and features.
• Tax applies on interest earned above ₹10,000 in a financial year for individuals.
• Customers should regularly review bank updates on interest rate changes.