Major banks raise savings account rates to 7% as competition intensifies

Three major Indian lenders have announced revisions to their savings account interest rates, reflecting intensifying competition in the retail banking segment. Canara Bank, Bank of India, and IDFC FIRST Bank now offer rates reaching up to 7 percent on savings deposits, marking a notable increase in returns for account holders.

The revised rates come as banks seek to attract deposits in an environment where customers have become increasingly rate-conscious. The three banks have structured their offerings across different balance slabs, meaning the interest rate applicable to an account depends on the minimum balance maintained or the account tier selected.

Prospective customers evaluating these offerings should examine several key factors before transferring funds. The interest calculation method—whether daily, monthly, or quarterly compounding—significantly impacts effective returns. Additionally, the frequency and flexibility of withdrawals permitted under each account variant warrant careful review, as some higher-yielding accounts may impose restrictions on transaction limits.

Comparison of balance thresholds required to access the highest rates is equally important. Banks may stipulate minimum balance requirements that vary across accounts, affecting which customers qualify for the 7 percent rate. Existing account holders should also review their current terms to determine whether they automatically qualify for revised rates or must upgrade to a different account category to access improved returns.