Which Bank Gives the Highest Interest Rate on Savings Account in India

Savings Account Interest Rates – Bank Wise Comparison

Public Sector Banks

If you bank with a public sector bank, don't expect a high return on your savings account. The rates are low, but what you get in return is a massive branch network, government backing, and decades of trust. For students or first-time account holders, most of these banks also have a zero balance savings account option that skips the minimum balance requirement entirely.

Private Sector Banks

Small Finance Banks

Who Gives the Highest Savings Account Interest Rate?

Small finance banks are where the highest savings account interest rates sit right now. Some go as high as 7.5%, but usually only once your balance crosses a certain threshold. Among private banks, IDFC FIRST Bank is worth a look since some of its account variants need no minimum balance and still pay up to 6.50%.

The rate advertised is almost always the top-slab rate, not what you'd earn on a regular balance. Before making a move, do a quick balance check on what your monthly average actually looks like. Most banks only unlock the higher rate above ₹1 lakh or ₹5 lakh.

Important Things to Check Before Switching

Chasing the highest rate without checking the fine print can leave you worse off. Here's what to look at first:

• Balance slabs: Run an account balance check over 2–3 months to find your average, then see which slab that falls into. The top rate only applies to a specific portion of your balance, not all of it
• Minimum balance requirement: A savings account that charges ₹500–₹1,000 every month for not maintaining the minimum will cancel out any extra interest you earn
• Zero balance savings account: If your balance goes up and down, accounts like Kotak 811, IDFC FIRST Bank, or SBI BSBD let you hold a zero balance savings account with no penalty charges, though the rate is on the lower side
• DICGC insurance: Up to ₹5 lakh per bank is covered. If you're putting in more than that, split it across two banks rather than keeping it all in one place
• Digital access: A good app and internet banking matter more than people think, especially when you're doing an account balance check or moving money at odd hours

Tax on Savings Account Interest

Interest earned on a savings account is taxable, but you get a deduction:

• Section 80TTA: Up to ₹10,000/year is tax-free for individuals below 60
• Section 80TTB: Senior citizens get a higher deduction of up to ₹50,000/year
• Anything earned above these limits is taxed as per your income tax slab

Which Bank Should You Choose?

• For highest savings account interest rates: Ujjivan Small Finance Bank, Utkarsh Small Finance Bank, or Jana Small Finance Bank (up to 7.5%)
• For balance between rate and reliability: IDFC FIRST Bank or IndusInd Bank
• For a zero balance savings account with a decent rate: Kotak 811 or IDFC FIRST Bank
• For branch access and trust: SBI or any public sector bank (lower rate, wider reach)