Savings Account FAQ

Your savings account questions, answered.

How is savings account interest calculated?
Since 2010 the RBI requires savings interest to be calculated on the daily closing balance and credited at least quarterly. Many banks use balance slabs, paying a higher rate above a threshold. As of 14 Nov 2026, the highest savings rate we track is 7.00% at IDFC First Bank. Compare the best savings account rates here.
Why do some banks offer much higher savings rates than others?

Small finance banks and some newer private banks offer higher savings rates (often on balances above a slab) to attract deposits, while large public and private banks keep rates low because they have ample low-cost deposits. All RBI-licensed banks carry the same ₹5 lakh DICGC insurance, so the higher-rate banks aren't inherently riskier up to that limit.

Is savings account interest taxable?

Savings interest is taxable, but Section 80TTA allows a deduction of up to ₹10,000 of savings interest per year for those under 60. Senior citizens get a larger ₹50,000 deduction under Section 80TTB covering both savings and deposit interest.

Savings account or fixed deposit? Which should I choose?
A savings account keeps money fully liquid for day-to-day use at a lower rate; a fixed deposit locks money away for a term at a higher rate. For money you won't need soon, an FD (or an auto-sweep FD) usually earns more. Compare both: best FD rates.

Informational only. Always confirm the current rate and terms on the bank's official website before investing. See how we compile and verify rates in our methodology.