The high interest rate regime seems to be over in the country with the RBI slashing its repo rate, at which it lends to commercial banks, by 50 basis points (bps) this year. The key benchmark lending rate of the central bank now stands at 6% after last 25 bps cut on April 9, 2025.
Now, the repo rate cut impact can bee seen on various bank products, including loans, fixed deposits and savings account deposits. Over the past one week, several banks, including public sector lenders, have cut their lending rates and adjusted their fixed deposit rates. Banks have also trimmed rates for savings account holders.
Lowest savings account interest in public sector banks
Most of the public sector banks are currently giving interest rates ranging from 2.7% to a maximum of 2.9% on savings accounts. Big banks like State Bank of India (SBI), Punjab National Bank (PNB), and Bank of Baroda are giving only 2.7% interest.
Bank of India, Indian Bank, Bank of Maharashtra, Indian Overseas Bank and Union Bank of India are offering 2.75% interest rate to their savings account customers. Central Bank of India’s rate is slightly higher at 2.8%. At the same time, Canara Bank is at the forefront with a rate of 2.9%.
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Private sector banks offering slightly better rates to savings account customers
Private sector banks are giving slightly better returns. ICICI Bank, Axis Bank, Kotak Mahindra, Yes Bank, IDFC Bank, Federal Bank, Bandhan Bank and AU Small Finance Bank are all paying 3% interest. At the same time, RBL Bank is offering the highest interest of 3.25%.
HDFC Bank, IDBI Bank and Karnataka Bank are all offering 2.75% interest rates to their savings account customers. Among the private sector lenders, RBL Bank is giving the highest rate of 3.25% to their savings account customers.
Savings Account Interest Rates – PSU banks Vs Private banks Savings Account Interest RatesPublic Sector BanksBanksInterest Rates (%)SBI2.7Bank of Baroda2.7Bank of India2.75PNB2.7Central Bank of India2.8Canara Bank2.9Indian Bank2.75Bank of Maharashtra2.75Indian Overseas Bank2.75Union Bank of India2.75Private Sector BanksHDFC Bank2.75ICICI Bank3Axis Bank3Kotak Mahindra Bank3Yes Bank3Federal Bank3IDFC Bank3IDBI Bank2.75RBL Bank3.25Bandhan Bank3AU Small Finance Bank3Karnataka Bank2.75Interest rates on minimum balance is considered in the table. » Read More
