The interest rates on savings accounts offered by banks can vary depending on the tenure of Fixed Deposits (FDs) and often change over time. These rates are influenced by market liquidity and policies set by the Reserve Bank of India (RBI), meaning they are not consistent across different banks. It’s wise to regularly check to find the most competitive rates.
Recently, Axis Bank, a private sector entity, reduced its savings account interest rate by 0.50%, bringing it down to 3.50% annually for balances up to Rs. 50 lakh. This change happened soon after the State Bank of India (SBI) made a similar reduction, a trend expected to continue with other banks.
On July 31, SBI, the largest bank in India, introduced a two-tier interest rate system for savings accounts. For balances below Rs. 1 crore, the interest rate fell from 4% to 3.5%. Balances over Rs. 1 crore still earn 4%. SBI stated that this decision was influenced by decreasing inflation rates and high real interest rates. Since about 90% of SBI’s savings accounts hold less than Rs. 1 crore, this change affects a large number of its customers.
Bank of Baroda has also followed this trend, cutting its interest rate on savings accounts to 3.5% for deposits up to Rs. 50 lakh. Other major Indian banks like PNB and HDFC are also reducing their savings account interest rates to 3.5%.
However, digibank by DBS offers a different scenario with a generous 7% interest rate on deposits. This bank attracts customers with benefits like free unlimited ATM withdrawals, no minimum balance, integrated UPI, and quick 90-second account openings. It stands out not just for its high interest rate and customer-friendly features but also for its accolades, such as “Asia’s Best Bank” by The Banker and Euromoney, “Asian Bank of the Year” by IFR Asia, and “Safest Bank in Asia” by Global Finance from 2009 to 2016.
Known for its innovative digital strategies and customer convenience, digibank’s free features make it a popular choice for savers. With a secure and user-friendly platform, customers can open accounts quickly at partner-operated outlets (over 500 cafes nationwide) in a completely paperless, signature-less, and branchless manner. Using Aadhaar card verification ensures a high level of security. Therefore, digibank not only offers competitive interest rates but also delivers a superior banking experience.