These 3 Banks Offering Minimum 4% Interest On Daily Balance Up To 1 Lakh, Should You Open Account?

The Reserve Bank of India (RBI) raised its repo rates this year 3 times, which severely hurt loan borrowers but also raised the interest rates on fixed deposits (FDs) and savings accounts.

One of the simplest strategies to get returns could be to earn interest from a savings bank account. Currently, several institutions are offering rewards on savings accounts of up to 6-7%. However, only a few banks offer a minimum of 4 per cent on a daily balance of up to Rs 1 lakh. Some banks even offer attractive interest on the savings account balance, which is at par with the average interest rate offered in an FD account.

Savings Account Interest rates

The interest rate that applies to a savings account can change based on the account type, the average balance kept in the account, and other conditions set by the respective bank. For instance, if a savings account balance exceeds a predetermined daily balance level, the bank might provide a higher interest rate on the balance above the predetermined daily balance. Interest on savings accounts is calculated on progressive balances in each Interest Rate Slab, as applicable. The money in a savings account does not have a maturity time, and the interest rates are typically paid out quarterly and in some banks such as IDFC First bank on a monthly basis. 

Here are the 3 private sector banks which are offering a minimum 4 percent interest rate on a daily balance of up to 1 lakh:

RBL Bank

The private sector lender RBL Bank has changed the interest rates on savings accounts on domestic savings deposits (including NRE/NRO savings). The new rate went into effect on September 5, 2022, according to the bank's official website. The bank offers interest rates between 4 per cent to 6.25 per cent on the savings account. RBL bank offers the highest interest rate on daily balances up to Rs 1 Lakh. 

Daily balance	Rate of Interest (p.a.) w.e.f. September 05, 2022
Upto Rs. 1 lakh	4.25%
Above Rs. 1 lakh upto Rs. 10 lakh*	5.50%
Above Rs. 10 lakh upto Rs. 25 lakh*	6.00%
Above Rs. 25 lakh and upto Rs. 1 Crore*	6.25%
Above Rs. 1 Crore and upto Rs. 3 Crore*	6.25%
Above Rs. 3 Crore upto Rs. 5 Crore*	6.25%
Above Rs. 5 Crore upto Rs. 7.5 Crore*	6.25%
Above Rs. 7.5 Crore upto Rs. 10 Crore*	6.10%
Above Rs. 10 Crore upto Rs. 50 Crore*	6.10%
Above Rs. 50 Crore upto Rs. 100 Crore*	5.25%
Above Rs. 100 Crore upto Rs. 200 Crore*	6.00%
Above Rs. 200 Crore upto Rs. 250 Crore*	4.00%
Above Rs. 250 Crore upto Rs. 500 Crore*	4.00%
Above Rs. 500 Crore*	4.50%

 

Yes Bank

Yes Bank is a major private sector lender in India, which offers a 4 per cent interest rate on daily balances up to Rs 1 lakh. The bank has recently altered its interest rate on savings accounts. According to the bank's official website, the new rates are effective from 17 September 2022. The interest rates range from 4 per cent to 6.25 percent. Interest is calculated on a monthly basis by the bank.

Daily Balance in the Savings Account (INR)	Applicable Interest Rates (p.a.)
<=1 Lac	4.00%
>1 Lac to < 5 lacs	4.25%
>=5 Lac to < 10 lacs	5.00%
>=10 lacs to < 25 lacs	5.50%
>=25 lacs to < 1 Cr	6.00%
>=1 Cr to < 10 Cr	6.25%
>=10 Cr to < 25 Cr	6.25%

IDFC First bank

IDFC Bank is an Indian private sector, founded by the merger of Erstwhile IDFC Bank and Erstwhile Capital First on December 18, 2018. The bank offers an interest rate between 3.50 per cent to 6 per cent effective from 20 July 2022. The bank offers interest rates on savings accounts on a monthly basis. The bank offers up to 4 per cent on daily balances up to Rs 10 lakh. 

On Balances (in ₹)	Rate of Interest (% p.a.)
<= 10Lac	4.00%
> 10 lac <= 25 Cr	6.00%
> 25 Cr <= 100 Cr	5.00%
>100 Cr <= 200 Cr	4.50%
> 200 Cr	3.50%

Source- Bank's Website

Before opening an savings account you must be aware that the Deposit Insurance and Credit Guarantee Corporation (DICGC) only guarantees deposits up to Rs. 5 lakh for safety reasons, including interest. If a person wants a better return on their savings account deposits, they should also choose a savings account with a sweep-in/Flexi deposit capability and high interest rate.