Best Savings Accounts in India 2026: Interest Rates, Features & Comparison
Your Finances Team
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Your Savings Account Is Probably Paying You Too Little
Most Indians keep their money in an SBI or HDFC savings account and earn a measly 2.70–3.00% interest. Meanwhile, banks like AU Small Finance and Equitas are offering 7.00% on savings accounts — more than double what the big banks pay.
Choosing the right savings account can mean the difference between earning ₹2,700 and ₹7,000 per year on a ₹1 lakh balance. Over time, it adds up — especially for your emergency fund that just sits idle.
Here is a detailed, updated comparison of the best savings accounts in India as of April 2026.
Last updated: April 2026. We verify rates monthly from official bank websites.
Savings Account Interest Rates Comparison (April 2026)
| Bank | Interest Rate | Min Balance | Monthly Interest? | Best For |
|---|---|---|---|---|
| AU Small Finance Bank | 7.00% | ₹2,000–₹10,000 | Yes | Highest interest |
| Equitas Small Finance Bank | Up to 7.00% | ₹2,500 | Yes | South India presence |
| Unity Small Finance Bank | 7.00% | ₹5,000 | Yes | Digital-first users |
| IDFC FIRST Bank | Up to 6.50%* | ₹0 (Pratham) | Yes | Zero fees + high interest |
| Kotak Mahindra Bank | 3.50% | ₹0 (811 account) | No (quarterly) | Zero-balance digital |
| Axis Bank | 3.00% | ₹10,000–₹25,000 | No (quarterly) | Full-service banking |
| HDFC Bank | 3.00% | ₹10,000 | No (quarterly) | Largest branch network |
| ICICI Bank | 3.00% | ₹10,000 | No (quarterly) | iMobile app |
| SBI | 2.70% | ₹3,000 (metro) | No (quarterly) | Government banking |
| PMJDY (any bank) | ~2.70–4.00% | ₹0 | No | Financial inclusion |
*IDFC FIRST revised rates in January 2026: balances ₹5–10 lakh now earn 5.00% (down from 7.00%); above ₹10 lakh earn 6.50% (down from 7.00%). Balances below ₹5 lakh earn 4.00%.
Watch: Best Savings Accounts Compared
What Changed in April 2026: New RBI BSBD Rules
The RBI has introduced major upgrades to Basic Savings Bank Deposit (BSBD) accounts from April 1, 2026. If you have a zero-balance or basic account, here’s what’s new:
- Unlimited free cash deposits — at branch, ATM, or Business Correspondent. No charges ever.
- Free debit/ATM card — including annual renewal, no charges.
- Free chequebook — at least 25 leaves per year.
- Free internet and mobile banking — banks must provide digital access at no cost.
- 4 free withdrawals per month — including ATM and transfers.
- UPI, NEFT, RTGS, IMPS don’t count as withdrawals — only ATM/cash withdrawals count against the 4-per-month limit.
- Convert your existing account to BSBD — banks must process the conversion within 7 days, including via digital channels.
Who should consider a BSBD account? Anyone who keeps a low balance, gets hit with minimum balance penalties, or just wants zero-cost basic banking. It’s especially useful for students, homemakers, and retirees with modest balances.
Top Picks by User Type
Best for Maximum Interest: AU Small Finance Bank / Unity Small Finance Bank
If your primary goal is to earn the highest possible interest on your savings, AU Small Finance Bank and Unity Small Finance Bank both offer 7.00% per annum with monthly compounding.
On a balance of ₹5 lakh, you would earn roughly ₹35,000 per year — compared to just ₹13,500 at SBI. That’s an extra ₹21,500 for doing nothing differently.
The trade-off? Fewer branches and ATMs compared to big banks. But if you primarily bank digitally, this is a non-issue.
Best Overall: IDFC FIRST Bank
IDFC FIRST Bank remains arguably the best all-round savings account in India. Here’s why:
- Up to 6.50% interest rate with monthly compounding (for balances above ₹10 lakh)
- Zero fees on 28 services — no charges on NEFT, RTGS, IMPS, debit card, SMS alerts, demand drafts, and cheque books
- Pratham Savings Account has zero minimum balance
- Excellent mobile app with spending insights and auto-categorization
- Growing branch network across India
Important update: IDFC FIRST revised rates in January 2026. The rate for ₹5–10 lakh balances dropped from 7% to 5%, and above ₹10 lakh from 7% to 6.5%. It’s still competitive but no longer the highest. If rate is your top priority, AU SFB now wins.
Best Zero-Balance Account: Kotak 811
Kotak 811 remains the most popular zero-balance savings account in India. Open it entirely online in under 5 minutes with just your Aadhaar and PAN. The interest rate is 3.50% — better than SBI, HDFC, or ICICI — and there is no minimum balance penalty ever.
For students and young professionals just starting out, this is the easiest entry point. You can upgrade to a full Kotak savings account later.
Best for Students: SBI BSBD or PMJDY Account
With the new RBI BSBD rules from April 2026, basic accounts are now even better:
- Zero minimum balance
- Free RuPay debit card (issuance + annual renewal)
- Free chequebook (25 leaves/year)
- Free internet and mobile banking
- Accidental insurance coverage (₹2 lakh under PMJDY)
- UPI/NEFT/IMPS transactions unlimited and free
Best for Senior Citizens: SBI or HDFC
Senior citizens typically get an extra 0.50% interest on savings accounts at most banks. SBI offers 3.20% for seniors, HDFC offers 3.50%. For seniors who need branch access for passbook updates and in-person banking, the large branch networks of SBI and HDFC are hard to beat.
Best for Salaried Professionals: HDFC or ICICI Salary Account
If your company offers a salary account with HDFC or ICICI, take it. Salary accounts come with waived minimum balance requirements, higher ATM withdrawal limits, and pre-approved loan offers.
However, consider opening a secondary account at AU SFB or IDFC FIRST to park your surplus cash at higher interest rates. Keep 1–2 months expenses in the salary account, move the rest to the high-interest account.
Minimum Balance Penalties: A Hidden Cost
Many people don’t realize how much they lose to minimum balance penalties:
| Bank | Min Balance (Metro) | Penalty (per quarter) |
|---|---|---|
| SBI | ₹3,000 | ₹100–300 + GST |
| HDFC | ₹10,000 | ₹150–600 + GST |
| ICICI | ₹10,000 | ₹100–400 + GST |
| Axis | ₹10,000–₹25,000 | ₹150–750 + GST |
| IDFC FIRST (Pratham) | ₹0 | ₹0 |
| Kotak 811 | ₹0 | ₹0 |
| Any bank (BSBD) | ₹0 | ₹0 |
New in April 2026: You can now convert any existing savings account to a BSBD account within 7 days. If you frequently dip below minimum balance, consider switching to BSBD — it’s free by law.
Digital Features Comparison
In 2026, your savings account is only as good as the app that comes with it:
- IDFC FIRST: Auto-categorizes spending, investment tracking, bill reminders, UPI — one of the best banking apps
- Kotak 811: Clean interface, instant account opening, seamless UPI, virtual debit card
- HDFC: Feature-rich but slightly cluttered app, excellent bill pay ecosystem
- SBI YONO: Covers banking, insurance, investments, and shopping — but can be slow
- ICICI iMobile: One of the best banking apps in India — fast, intuitive, and feature-complete
- AU SFB: Decent app, improving rapidly. UPI, FD booking, and account management all available
When to Move Money Out of Savings
A savings account should hold your emergency fund (3–6 months of expenses) and short-term spending money. Anything beyond that should be invested:
- Short-term (3–12 months): Fixed deposits — earn 7–8% with guaranteed returns. Use our FD Calculator to check returns
- Medium-term (1–3 years): Debt mutual funds or short-term FDs
- Long-term (3+ years): SIP in equity mutual funds — historically 12–15% returns. Use our SIP Calculator
- Retirement: PPF (7.1% tax-free) or NPS for additional tax saving. Check our PPF Calculator and NPS Calculator
Rule of thumb: Don’t keep more than 3 months of expenses in your savings account. Everything extra should be working harder for you.
How to Switch Your Savings Account
- Open a new account at your preferred bank (most allow 100% online opening)
- Update your salary credit, SIPs, and auto-debits to the new account
- Transfer your balance
- Keep the old account open for 2–3 months to catch any missed payments
- Close the old account once everything is redirected
Frequently Asked Questions
Is my savings account interest taxable?
Yes. Savings account interest is taxable under “Income from Other Sources.” However, you get a deduction of up to ₹10,000/year under Section 80TTA (for those under 60) or ₹50,000 under Section 80TTB (for senior citizens 60+). Beyond that, TDS applies if interest exceeds ₹40,000/year (₹50,000 for seniors). You can submit Form 121 to avoid TDS if your total income is below the taxable limit.
Can I have savings accounts in multiple banks?
Yes. There’s no limit on the number of savings accounts you can hold. A smart strategy: keep your salary account at a major bank (HDFC/ICICI) for convenience, and a high-interest account at AU SFB or IDFC FIRST for your savings and emergency fund.
What is a BSBD account and should I get one?
BSBD (Basic Savings Bank Deposit) is a zero-balance, zero-fee account that every bank must offer. From April 2026, it comes with free debit card, free chequebook (25 leaves), free internet banking, and unlimited UPI/NEFT. If you get hit with minimum balance penalties, ask your bank to convert your account to BSBD — they must do it within 7 days.
Which savings account has the best app?
ICICI iMobile and IDFC FIRST are tied for the best banking apps. iMobile is faster and more polished; IDFC FIRST has better spending insights and zero fees. For pure digital-first experience, Kotak 811 is excellent for beginners.
Is it safe to keep money in small finance banks?
Yes. Savings accounts in AU SFB, Equitas SFB, and other small finance banks are covered by DICGC insurance up to ₹5 lakh — the same protection as SBI or HDFC. Your money is equally safe. Small finance banks are fully regulated by the RBI.
The Bottom Line
If you’re still earning 2.70% at SBI or 3.00% at HDFC, you’re leaving money on the table. Opening a high-interest savings account at AU Small Finance Bank (7.00%) or IDFC FIRST (up to 6.50%) takes less than 10 minutes and can more than double your interest earnings.
And with the new BSBD rules from April 2026, even basic accounts now come with free debit cards, free chequebooks, and unlimited UPI — making zero-balance accounts better than ever.
Your savings account should not be an afterthought. It’s the foundation of your financial life. Choose wisely.
Disclaimer: Interest rates and features are accurate as of April 2026 and may change. Always verify current rates on the bank’s official website before opening an account. This article is for informational purposes only and is not financial advice.
Written by
Your Finances Team
Helping Indians make better financial decisions through simple, actionable advice.
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