Select banks raise savings account interest the most after RBI hikes repo rate
Small and new private banks are offering higher interest rates on savings accounts compared to leading private and public sector banks to acquire new retail customers
Several smaller and new private banks have raised interest rates on savings accounts following the Reserve Bank of India’s (RBI) two consecutive repo rate hikes in May and June of cumulative 90 basis points to 4.9 percent (100 basis points = 1 percentage point). Bankbazaar did a study of interest rate hike on savings accounts between 23 March 2022 (before repo rate hike) and 22 June 2022 (after repo rate hikes). Interest rate on savings account for all listed (BSE) public banks, private banks and foreign banks are considered for data compilation.
2/9
Make a practice to keep a part of your surplus income in savings accounts for liquidity and emergencies during uncertain times. Here are the banks which have raised the interest rates on savings accounts and are offering up to 6 percent interest rate.
3/9
IDFC First Bank is now offering interest rates up to 6 percent on savings accounts. Prior to repo-rate hikes, it offered an interest rate up to 5 percent on savings account. The average monthly balance requirement is Rs 10,000.
4/9
CSB Bank is now offering interest rates up to 5 percent on savings accounts. Prior to repo-rate hikes, it offered an interest rate up to 3.5 percent on savings account. The average monthly balance requirement is from Rs 2,500 to Rs 5,000.
Kotak Mahindra Bank and Federal Bank are now offering interest rates up to 4 percent on savings accounts. Prior to repo rate hikes, Kotak Mahindra Bank offered an interest rate of 3.5 percent on savings account and Federal Bank offered an interest rate of 3.8 percent on savings account. The average monthly balance requirement at Kotak Mahindra Bank is from Rs 2,000 to Rs 10,000 and at Federal Bank the average monthly balance requirement is Rs 5,000.
6/9
Union Bank of India is now offering interest rates up to 3.55 percent on savings accounts. Prior to repo rate hikes, it offered an interest rate of 2.90 percent on the savings account. The quarterly average balance requirement is from Rs 250 to Rs 1,000.
7/9
Bank of Baroda is now offering interest rates up to 3.35 percent on savings accounts. Prior to repo rate hikes, it offered an interest rate up to 3.30 percent on the savings account. The quarterly average balance requirement is from Rs 500 to Rs 2,000.
8/9
Small and new private banks are offering higher interest rates on savings accounts compared to leading private and public sector banks to acquire new retail customers. You should choose a bank with a long-term track record, good service standards, a wide branch network, and ATM services across cities; a higher interest on savings accounts would be a bonus.
BankBazaar compiled the data as of June 22, 2022. Banks whose websites don't advertise the data are not considered.
Hiral Thanawala is a personal finance journalist with 9 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
