Banking & Savings · 8 min read
Highest savings account interest rates in India (2026)
SBI, HDFC and ICICI pay about 2.7 to 3% on your savings. Small finance banks like AU, Equitas and Ujjivan advertise up to 7.5%, with the same RBI-backed DICGC insurance. Here is the honest comparison.
Krish Dalal
Founder and editor, PaisaExpert. Master's in Business Management, SP Jain School of Global Management, London. · Last updated 2026-06-30
Most Indians leave six-figure balances in SBI, HDFC or ICICI savings accounts earning 2.7-3%, when DICGC-insured small-finance banks like AU, Equitas and Ujjivan offer 7-7.5% on the same first ₹5 lakh of deposits, with identical RBI deposit insurance behind it.
Current best rates (verify on bank site before opening)
| Bank | Rate on ₹1L+ savings | Min balance | Honest catch |
|---|---|---|---|
| AU Small Finance Bank | Up to 7.25% | Nil | Mature app, good UPI support, the safe SFB pick |
| Equitas Small Finance Bank | Up to 7.00% | Nil | Sweep-FD feature is excellent |
| Ujjivan Small Finance Bank | Up to 7.50% | Nil | Newer app, onboarding can be slow |
| SBI | 2.70% | ₹3,000 (urban) | Default for most Indians, should not be |
| HDFC / ICICI | 3.00% | ₹10,000 | Better UX, worse interest. Worth it only for premium banking services. |
A simple three-layer system
| Layer | Where to keep it | Why |
|---|---|---|
| Float (1 month of expenses) | Your existing salary account (SBI/HDFC/ICICI/Axis) | Convenience, UPI, auto-debits |
| Buffer (2-3 months of expenses) | AU/Equitas/Ujjivan savings account | Liquid, 7%+ rate, fully DICGC-insured up to ₹5 lakh |
| Emergency fund (3-6 months of expenses) | Sweep-FD inside that same SFB account | Locked but instantly breakable, slightly higher rate |
What to check before you switch
Three honest caveats. First, the headline rate usually applies only above a balance tier (often ₹1 lakh) and on the slab up to ₹5 lakh, so a small balance may not earn the advertised number. Second, small finance bank apps and ATM networks are improving but still thinner than HDFC or ICICI, which is why most people keep the small finance bank as the high-yield store and run daily spending through their existing salary account over UPI. Third, the rate can move with the RBI rate cycle, so treat any number you see, here or on a comparison site, as 'verify before opening', not a promise.
Two related reads tie this together: the full framework on how much to keep in your savings account, and the after-tax angle, since savings interest is taxable at your slab above the section 80TTA limit.
Frequently asked
What to do next
- Open an account at AU or Equitas via their app (Aadhaar OTP, done in 10 minutes).
- Transfer your buffer + emergency-fund money over. Leave only one month's float in the SBI/HDFC salary account.
- Set up sweep-to-FD if available, any balance above ₹50,000 auto-sweeps into a 7-day FD.