If you are looking for a savings account that offers higher returns than the usual 2.5%–4% offered by most large banks, a few lenders currently advertise interest rates of 7% or more. However, there’s an important caveat: many of these higher rates apply only to very large balance slabs, in some cases running into lakhs or even crores of rupees, making them less relevant for the average retail saver. Financial experts also generally advise against keeping excessively large idle balances in savings accounts for long periods, as cash management, diversification, and deposit insurance considerations also matter alongside headline interest rates.
Savings account interest rates 2026
These are some banks that offer a savings account rate of over 7% with some balance slab conditions.
| List of Banks | Interest Rates (p.a) | Applicable balance slabs |
| Jana Small Finance Bank | 7.00% | On balances above Rs.50 lakh up to Rs.20 crore |
| Equitas Small Finance Bank | 7.00% | Above Rs. 25 Crores |
| Shivalik Small Finance Bank | 7.00% | On balances above Rs.50 lakh and up to Rs.10 crore |
| Induslnd Bank | 7% to 7.05% | On balances above Rs.100 crore up to Rs.1,400 crore |
| Ujjivan Small Finance Bank | 7.10% | On balances above Rs.25 crore |
| ESAF Small Finance Bank | 7% to 7.50% | On balances above Rs.1 crore and up to Rs.50 crore |
| Suryoday Small Finance Bank | 7.5% to 7.75% | On balances above Rs. 10 lakh and up to Rs.25 crore |
| Utkarsh Small Finance Bank | 7.75% | On balances above Rs.50 crore |
| Note: Data taken from BankBazaar.com. | ||
How is savings account interest taxed in India?
Interest earned on a savings account is taxable under the head “Income from Other Sources”. However, taxpayers who opted for the old tax regime can claim a deduction on savings account interest under Section 80TTA of the Income-tax Act.
As per Cleartax, interest earned from savings accounts held with banks, post offices, or cooperative societies can be claimed as a deduction of up to Rs 10,000 in a financial year by individuals and Hindu Undivided Families (HUFs).
The benefit is available to senior citizens under Section 80TTB under the old tax regime, which provides a higher deduction limit of up to Rs 50,000 on interest income from deposits, including savings accounts and fixed deposits.
Savings account interest rate trends
In the last three years, the movement in India’s savings account interest rates has been mixed, with the Reserve Bank of India’s (RBI) repo rate decisions playing a big role. After an array of rises in 2022 to control inflation, the RBI kept the repo rate at 6.50% for a prolonged period, and most banks like Yes Bank, IndusInd Bank, HDFC Bank, SBI and more kept savings account rates largely stable between 2023 and 2024.
During this phase, most public sector and private sector banks maintained to offer the savings account interest rate in the range of 2.70% to 4%, while a few small finance banks and some private lenders offered a higher rate of interest above 6% or even 7% on select slabs of balances in order to attract deposits.
The pattern began to reverse in 2025 with the RBI cutting the repo rate for the first time in nearly five years. In 2025, the Reserve Bank of India (RBI) lowered the repo rate cumulatively by 125 basis points (1.25%). The central bank steadily reduced the rate from 6.50% at the start of the year to 5.25% in December. As repo rates went down, big banks started cutting down deposit rates, including savings account interest rates, for example, SBI to 2.5%, HDFC Bank and ICICI Bank to 2.75%, gradually to protect their margins even as lending rates and loan EMIs fell in many cases.
Banks like IDFC First Bank and RBL Bank had already cut savings account rates by early 2026, especially for higher balance slabs that were giving enticing high interest rates earlier. A few small finance banks provided interest rates above 7% on savings accounts in 2026, trying to grow their deposit base and remain competitive against larger banks, even as broader declines in interest rates. But such rates are typically linked with specific balance limits and may change promptly, subject to liquidity conditions and future policy actions by the RBI.
Disclaimer:
The interest rates and balance slab details mentioned in this article are indicative and may change at the discretion of respective banks without prior notice. Higher advertised savings account rates often apply only to specific high-balance slabs and may not be relevant for all customers.
Deposits with banks are insured by DICGC up to Rs 5 lakh per depositor per bank (subject to applicable terms and conditions). This article is for informational purposes only and should not be construed as financial advice. Readers should evaluate liquidity needs, safety, and product suitability before making decisions.