Highest Savings Bank Account Interest Rates in India

by Manshu on October 31, 2011

in Fixed Deposits

After the recent deregulation of savings bank account interest rates by RBI, at least three banks have hiked their interest rates.

Yes Bank was the first one to raise the interest rates on savings account with all balances to 6%, and this was followed by Indus Ind and Kotak bank announcing interest rates hikes on their savings accounts too.

I think other banks are going to follow suit soon, and I’m going to maintain a list of the best savings bank account interest rates on this page which will be updated periodically.

To start with, these are the three banks that have announced a hike in their interest rates.

S.No. Name Under Rs. 1 lakh Over Rs. 1 lakh
1 Yes Bank* 6.0% 7.0%
2 Indus Ind Bank 5.5% 6.0%
3 Kotak 5.5% 6.0%
4 Karnataka Bank 4.0% 4.0%**

*Yes Bank’s press release on their website.

**Karnataka Bank offers 5% for deposits over two lakhs.

Thanks to Hari for leaving comments and informing me about this.

Bemoneyaware caught the fact that the original RBI notification was being interpreted in at least two different ways – one was that all banks will have to pay the same interest rate on deposits of less than Rs. 1 lakh, and the other was that banks were free to decide the interest rates on deposits of less than a lakh as long as they don’t create slabs under that amount.

The fact that these banks have set up different rates for deposits of less than Rs. 1 lakh helps clarify that and show that there will be differential rates even for savings bank balances of less than a lakh. This is good because a large number of people will fall under this category.

Once again – thanks to Hari and Bemoneyaware for their timely and keen inputs.

Update: Thanks to Vivek for pointing out that Karnataka Bank has also raised their interest rates. 

{ 57 comments… read them below or add one }

Aman November 1, 2011 at 5:34 am

I was talking to my American colleagues about this, and their heads exploded! Its 0.35% here in US. What stops them from opening accounts in India and getting this interest (esp when the exchange rates are this high)? Anything?


Manshu November 2, 2011 at 5:04 am

Yes, only a resident Indian can open a fixed deposit to get these rates. Foreigners can’t open an account in India


Ashish November 29, 2011 at 6:17 pm

You and your friends can contact any of the major Australian Banks ( AA rated), namely NAB ( National Australia Bank), ANZ, Westpac or Commonwealth Bank of Australia, as their rates are around 5.70% or if they want to keep in an online account then thats even better. NAB has a sister concern in US called Great Western Bank and if assistance is needed you or your friends can call NAB on +61-3-8641-9013. These are Personal bankers who can manage this process for you and your friend.

Hope this helps




Hemal November 4, 2011 at 6:17 pm

heads exploded 🙂
tell them to compare the inflation rate, the heads will re-explode

There is a risk of Rupee depreciating further.
A dollar one year down the line with .35% will buy more stuff
than a dollar converted to Rs with 6% interest and then converted back to dollar


Mohan November 9, 2011 at 12:23 pm


You make a good point about the currency depreciation risk. However, the inflation is only a concern if those converted dollars must be spent in India. If the dollars can be taken abroad, they can be spent somewhere where dollars are accepted and inflation is steady–or decreasing. This is a strategy that I would love to implement myself, if only I could open a savings account!


Manshu November 9, 2011 at 7:30 pm

You could always open a NRO account, keep money in that and get the FD interest rates.


Krunal January 26, 2012 at 11:55 am

Hey hemal,
Can u pls explain in detail ur point..
About dollar earning more stuff wen rupee is depreciating
and dollar converted into rupees can buy more stuff.


Manshu January 27, 2012 at 12:35 am

What he is saying is that suppose an American decides to invest $1,000 in SBI at 9% when the USDINR rate is 1:50 – He will get Rs. 50,000 at this exchange rate and earn a return of Rs.4,500 so at the end of the year he will have Rs. 54,500.

Now, suppose the INR depreciates and you can get more INR per Dollar say 1:54.50 – in this case when you convert the money back in Dollars you will only get $1,000 back and so you don’t earn anything at all. This is known as currency risk.


bemoneyaware November 1, 2011 at 10:36 am

Read in ET (30 Oct Sunday):ET epaper
Banks with the lowest saving deposit rates as a share of total deposits will be aggressive with rates because this forms their lowest cost fund source
Banks with saving deposits as % total deposits are as follows:
SBI(36%), HDFC(31%), ICICI(29%), PNB(29%), Allahabad(26%), Axis Bank(23%), Union(23%), BOB(21%), BOI(20%), Indusland(9%), Yes(3&).

No wonder HDFC Bank stock fell most after the announcement.


bemoneyaware November 1, 2011 at 10:39 am

Let’s see how the big banks like HDFC and SBI respond. But should you switch banks to take advantage of higher rates?

If you still go ahead, check the fees. Most analysts believe that banks would offset higher costs by hiking fees for services. This can be in the form of higher lending rates for borrowers, transaction charges and increase in minimum balance requirement. The prudent way is to first gauge your usage pattern of banking services – do you frequently run out of cheque books or withdraw cash often. In that case, you need to also check what kind of charges banks levy for these


Manshu November 2, 2011 at 4:35 am

SBI has come out today and said they aren’t going to hike rates for some time and play a wait and watch game.


bemoneyaware November 1, 2011 at 10:45 am

Thanks Manshu for mentioning us. I would like to give credit to Hari as he put the link that made us go and check it.
We also appreciate that you encourage your readers to leave the links for reference even though they might of similar/competitor websites. We have seen many websites removing the reference. Keep up the good work!


Manshu November 2, 2011 at 4:35 am

Yes, big thanks to Hari.

I don’t mind anything as long as it contributes to the discussion and forwards the understanding of the topic. However, I do realize that a lot of other bloggers / websites remove OneMint links from their comments section and forums. I know this because I check Google Analytics data quite regularly and click through all referring pages. Often when I find that a referring page has stopped sending traffic – I go to the original page and see that they have removed the link. It irritates me a little to see people leaving their links on OneMint but I will never remove them. That’s not the right thing to do.


sampreeth November 1, 2011 at 12:32 pm

will this really help the customers. Once people shift to a particular bank the bank would subsequently change the interest rates. I feel this will be just a gimmick to attract people to their banks to open accounts.


Manshu November 2, 2011 at 4:32 am

This is a more fundamental change than just a gimmick where you give a free coconut with a washing machine – this is a competitive market and people can easily move their funds around online so if banks act smart then you have the option of going away and taking your money elsewhere.


Ashok November 9, 2011 at 1:47 pm

Be that as it may but I don’t think many people will actually shift from “reliable” banks like SBI or HDFC to smaller and riskier “Yes Bank” types. And the big two private banks (ICICI and HDFC) will do their usual cartel thing and increase/decrease rates in tandem (their fixed deposit rates always move in sync).


Manshu November 9, 2011 at 7:29 pm

You don’t actually need to close one account and open another one – you could just open a second one and transfer money online.


vcpandya March 20, 2012 at 7:58 am

Just for your information, DICGC guarantees deposits up to 100000.
Moreover YES Bank is 4th Largest Private Sector Bank, ahead of Kotak & Indusind and has lowest NPAs in the industry, so by no means it is riskier in my opinion 🙂


Nine Million Dollars November 1, 2011 at 11:32 pm

After savings interest rate deregulation, one must say BYE BYE to liquid funds….Any more thoughts would be appreciated


Manshu November 2, 2011 at 4:24 am

Aren’t the corporates and proprietors mainly the ones who form the majority of liquid funds? I would assume that though the liquid funds might see reduced inflows, they will still see strong demand from that group.


Hari November 2, 2011 at 12:33 pm

Thanks for your appreciation Manshu and bemoneyaware 🙂
One more bank has upped its SB a/c interest rates wef 1-Nov-2011, this time its the smaller Ratnakar Bank – they are offering 5.5 % pa.


Manshu November 2, 2011 at 9:04 pm

Wow how are you keeping track of all these changes – amazing.


George November 2, 2011 at 3:57 pm

what about NRE/ NRO savings account rate?


Manshu November 2, 2011 at 9:03 pm

NRO savings rate are usually the same as the regular saving rate, and NRE rates are quite low. There is a post here and you can go through that by going through the NRI category and reading that.


Krunal January 26, 2012 at 12:05 pm

hey muanshu,
Can u explain details abt NRE NRO A/cs, the purpose and the need.


Manshu January 27, 2012 at 12:29 am

Those are accounts that NRIs need to open if they want to operate a Rupee account in India. The difference is in between how much INR they can take out of the country based on the account they have.

Here is a detailed post on that:



Vimal Raj November 3, 2011 at 1:32 pm

Good information Manshu. Also thanks to Hari.


Neeraj Gupta November 14, 2011 at 10:52 am

Dear Mr Manshu,

Kindly help in confirming if ICICI has also made some change to their savings accounts interest rate changes, and if yes then by how much.

Waiting for your reply and by the ways thanks for the updates you have done in your website..


bemoneyaware November 14, 2011 at 5:19 pm

Those who have increased have shouted it such as Yes Bank or Kotak who have taken out the advertisements in Newspapers. Those who haven’t are quiet. ICICI website Interest rates on ICICI does not show any increase so I assume it is not.


Manshu November 15, 2011 at 12:09 am

LOL, quite accurate!


Neeraj Gupta November 14, 2011 at 6:53 pm

Thanks a lot Mr. Bomoneyaware for this update as I was under an illusion that ICICI had made an increase in the interest rate.


Vivek December 19, 2011 at 6:19 pm

Karnataka Bank has increased SB Interest rate to 5% ..


Manshu December 20, 2011 at 2:09 am

Thank you Vivek – updated the post with that info.


Vivek June 11, 2012 at 5:52 pm

Karnataka Bank reverted SB Interest Rate to 4% for Balance below 2 Lakh and kept 5% only for Balance above 2 Lakh w.e.f 01.05.2012.


Manshu June 12, 2012 at 5:10 pm

Thank you very much Vivek – I have updated the post.


Bhawna January 27, 2012 at 12:48 pm


so are you suggesting that we can open an account with the banks who are offering more on SB accounts? & keep the minimum amount in our existing banks like HDFC (INR10000.00) to gain interest!


bemoneyaware January 27, 2012 at 1:26 pm

I don’t think that’s the intention. My feeling is that it is to make one aware and help in making better financial decisions.

Changing bank simply because of deposit rate translates into minute gains.
Kotab Bank ad. says : it is not 2% more but 50% zyada. lets’s see how much one gains:
if Average Monthly Balance is 1,00,000 then interest at 4% will be 4000 and at 6% would be 6000 i.e 2000 Rs more per year which translates to 2000/12 = 150 Rs per month.
And if Average Monthly Balance is 30,000 then interest at 4% will be 1200 and at 6% would be 1800 i.e 600 Rs more per year which translates to 600/12 = 50 Rs per month.

Changing bank account means changing ECS, EMI payments etc.
Please remember that Interest on Bank Account is taxed as per the income slab.
Money kept in your savings account should ideally be for two purposes:

First, to meet your monthly fixed obligations, including EMI payments on your home, auto and personal loans, utility bill and credit card payments.
Second, as a buffer to meet contingencies.

This is from my article Saving Bank Account:Do you know how interest is calculated and more


Manshu January 27, 2012 at 11:38 pm

No, not really that was not what I wanted to say. Do what’s convenient as chasing an extra percent or two for smaller amounts isn’t going to make a big difference in the end.


iamsingle February 24, 2012 at 11:36 am

Hi Team,

Could you please tell me how much interest is given by SBI for savings bank account.



bemoneyaware February 25, 2012 at 5:56 am

Quoting from SBI website
RATE OF INTEREST : 4.00% p.a. (w.e.f. 03.05.2011)

I found it on a roundabout way on State Bank of India website. Go to State Bank of India website . Go to bottom of the page: you will find lots of links like:
Home | Sitemap | FAQs | Right to Information Act 2005 | Disclaimer
Click on Sitemap , On left hand side you will see

Click on INTEREST RATES On left hand side you will see

Click on SAVINGS BANK DEPOSITS. You will get required information.
Hope it helped.


Puneet Arora March 2, 2012 at 9:12 pm

I opened an account with Yes Bank today . .
The services are cool as well, min bal of 10K
U get free DD making (5/month) any amount
Any no of ATM TXNs across ATMs
ofcourse 3% more interest as my avg balance will be above 200k
plus the bank is right next to my office, so i can easily deposit cheques & withdraw as well

Why keep money idle in ICICI or HDFC when same can feth more somewhere else?
afterall, all i have to do is have a min bal of 10K . .

So too much thought leads to nothing, I jus went ahead & opened.
With net banking, moving money wont take much, pluc i can keep a reserve amount in ICICI for daily expenditure & rest can wait in Yes Bank ..


bemoneyaware March 3, 2012 at 5:04 pm

Quoting from my article Saving Bank Account:Do you know how interest is calculated and more
Money kept in your savings account should ideally be for two purposes:
First, to meet your monthly fixed obligations, including EMI payments on your home, auto and personal loans, utility bill and credit card payments.
Second, as a buffer to meet contingencies.

Changing bank simply because of deposit rate translates into minute gains unless you have huge sum idling in the bank. Ex:
If Average monthly balance is Rs 1,00,000 then at 4% you would earn 4000 but at 5.5% you would earn 5,500 Rs i.e gain of Rs 125 per month.

Now you have to manage two accounts with min. balance in each. If you have made SIPs in Mutual Funds you would have to change the bank mandate etc. Economic times article suggested that one should change bank mainly because of inefficient service, weak financial situation.


A.S.Shankar March 9, 2012 at 5:57 pm


Best Bank NRE Interest Rates


Manshu March 10, 2012 at 6:36 am

All NRE accounts are tax free in India right now. So you can choose the highest one from this link.



Nitin Gupta March 10, 2012 at 5:53 am

Interested in opening New Account, but not aware which one to open, monthly deposit close to 30K, starting from 1Lac, please suggest some bank, so athat i will get good returns on liquid money


Manshu March 10, 2012 at 6:31 am

That’s really your decision to make based on the info is available here.


ankm83 March 17, 2012 at 12:25 pm

The budget comes as big boost to Yes Bank and Kotak, as interest upto 10,000 on saving account is tax free. Therefore, balance of upto 157000 in Yes Bank is tax free, weighted average post tax yield of 6.36%, comparable pre tax yield of 9.22%. Better to keep money upto such cut off amount in saving account of Yes Bank or Kotak, rather than put in FD, as former is fully liquid and there is no penalty on withdrawal.


Manshu March 19, 2012 at 3:16 am

This is an interesting view point; do you have an account at Yes Bank? Do they give 6% on the entire amount that’s in your savings account or just the sum over Rs. 1,00,000?


vcpandya March 19, 2012 at 3:14 pm

Yes Bank gives 6% for amount less than Rs. 1,00,000 and 7% for about >= 1,00,000 which is way better than any other bank. ankm83’s cut off of 157000 is in fact higher but the exact cut off is 139000 without attracting any tax liability with 7% interest rate.


Manshu March 19, 2012 at 3:32 pm

I’m a bit confused by your comment because 157000 will generate Rs. 10,000 in savings account if you calculate the way you said. So, 6,000 on the first lakh, and then 3,990 on the remaining 57,000 (calculated at 7%)

If that’s the case then I’m a bit lost on where 139,000 is coming from?



vcpandya March 20, 2012 at 7:56 am


It is very simple, you will get interest on your daily closing balance but the interest will get credited only once in a quarter implying that it is quarterly compounding. Moreover as interest is going to be on daily closing balance if you have 1,20,000 in YES Bank then on first day you will get 7% on 1,20,000 for 1 day, on next day say you have 99,999 then you will get 6% on 99,999 hence this is not on the partial amount, the way you are thinking and I am sure about this 🙂

So simple excel model will tell you that @7% daily with quarterly compounding to earn 10000 interest what should be the initial principal amount (use goal seek) and you will get 1,39,000 as break even.

I hope this makes it clear 🙂


Manshu March 20, 2012 at 8:01 am

I see what you are saying now. I thought you were earlier saying you get 7% on the additional amount over a lakh. Thanks for clarifying. Also, how are you sure this is the way they calculate? Personal experience or you read somewhere?


vcpandya March 20, 2012 at 12:55 pm

Although RBI circular says otherwise that if you have 1,25,000 as balance, upto 1,00,000 bank should pay 6% and 7% for for 25,000, it is difficult for banks to implement the differential rate approach due to system issues so all the banks, till the time system fix comes, are paying higher rate on entire amount.


Manshu March 23, 2012 at 5:59 am



komal September 15, 2012 at 8:01 pm


Best Bank NRE Interest Rates


r.jayakumar October 7, 2012 at 4:50 pm

Indian bank information


ketki March 10, 2013 at 10:48 pm

good way to find out latest rates..



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