In a significant move to benefit savers, the Reserve Bank of India (RBI) has introduced new guidelines allowing banks to offer higher interest rates on savings accounts, ranging from 7% to 9%. This initiative aims to provide better returns for depositors and encourage a culture of saving among the public.
Also Check: Court’s Eviction Ruling: What Tenants Cannot Do – Be Aware Before You Face Consequences
Banks Interest Rates
- AU Small Finance Bank: Up to 7.25% per annum.
- Ujjivan Small Finance Bank: Up to 7.50% per annum.
- RBL Bank: Up to 7.50% per annum.
- DCB Bank: Up to 7.55% per annum.
- Suryoday Small Finance Bank: Up to 8.60% per annum.
- Jana Small Finance Bank: Up to 8.35% per annum.
- North East Small Finance Bank: Up to 9% per annum.
- Shivalik Small Finance Bank: Up to 8.55% per annum.
- Equitas Small Finance Bank: Up to 8% per annum.
- Bandhan Bank: Up to 8.05% per annum.
- Yes Bank: Up to 7% per annum.
- IndusInd Bank: Up to 6.75% per annum.
- Kotak Mahindra Bank: Up to 4% per annum.
- Canara Bank: Up to 4% per annum.
- ICICI Bank: Up to 3.5% per annum.
- Axis Bank: Up to 3.5% per annum.
- HDFC Bank: Up to 3.5% per annum.
- Bank of Baroda: Up to 3.35% per annum.
- Union Bank of India: Up to 4% per annum.
- SBI: Up to 3% per annum.
- Indian Bank: Up to 2.90% per annum.
- Bank of India: Up to 2.90% per annum.
- Punjab National Bank: Up to 2.90% per annum. Note: Rates are subject to change; please verify with individual banks. | | Minimum Balance Requirements | Vary by bank; some offer zero-balance accounts, while others require a minimum balance to avail higher interest rates. | | Interest Calculation | Typically calculated on daily balances and credited monthly or quarterly. |
For detailed information, visit the Reserve Bank of India official website.
Understanding Savings Account Interest Rates
When you deposit money into a savings account, the bank rewards you by paying interest on your balance. This interest is typically calculated daily and credited to your account on a monthly or quarterly basis. For example, if you have ₹10,000 in your account with an annual interest rate of 4%, you would earn ₹400 over the year.
How Interest is Calculated
Banks usually calculate interest based on the daily closing balance of your account. The formula used is:
Interest = (Daily Closing Balance × Interest Rate × Number of Days) / 365
This method ensures that any fluctuations in your account balance are accounted for in the interest calculation.
RBI’s New Guidelines: A Closer Look
The RBI’s decision to allow banks to offer higher interest rates on savings accounts is a strategic move to promote savings among the public. By providing better returns, the central bank aims to make savings accounts more attractive compared to other investment options.
Impact on Depositors
For depositors, this change means an opportunity to earn more from their savings. For instance, with a 7% interest rate, a balance of ₹1,00,000 would yield ₹7,000 annually, compared to ₹3,000 at a 3% rate.
Banks Offering Higher Interest Rates
Several banks have responded to the RBI’s guidelines by offering competitive interest rates:
- IDFC FIRST Bank: Offers up to 7.25% per annum on savings accounts.
- AU Small Finance Bank: Provides interest rates up to 7.25% per annum.
- Ujjivan Small Finance Bank: Offers rates up to 7.50% per annum.
- RBL Bank: Provides interest rates up to 7.50% per annum.
- DCB Bank: Offers rates up to 7.55% per annum.
- Suryoday Small Finance Bank: Provides interest rates up to 8.60% per annum.
Also Check: Huawei Pura X Flip Phone Launched! Stunning Design & Powerful Features Inside!
(FAQs)
1. What are the new RBI guidelines for savings account interest rates?
The Reserve Bank of India (RBI) has allowed banks more flexibility in setting interest rates on savings accounts. While the RBI does not fix the rate directly, it has enabled a competitive landscape where banks can now offer rates as high as 7% to 9%, especially through smaller finance banks and private institutions. Read more on the RBI website.
2. How often is savings account interest credited?
Most banks credit savings interest either monthly or quarterly. You can view the credited amount in your account statement or passbook.
3. How do these interest rates compare with Fixed Deposits (FDs)?
Some high-interest savings accounts now offer rates close to short-term FDs. While FDs often offer slightly better rates, they:
- Lock in your funds for a fixed period
- May charge penalties for early withdrawal
A high-interest savings account offers more liquidity and flexibility.
Also Check: Dreaming of a Govt Job? 50,000+ Openings in Rajasthan for 10th Pass – Apply Before It’s Too Late!
