IDFC First Bank raises savings rates: Offering up to 6.5% per annum

Progressive slabs pay more as your balance grows from Jan 9

IDFC First Bank has revised the interest rates on its savings accounts, with the new rates effective from January 9. The private sector lender has retained its distinctive progressive interest rate structure, under which different portions of a customer’s balance earn different rates, instead of applying a single rate to the entire amount.

 

This structure is designed to reward customers who maintain higher balances, while continuing to offer liquidity and flexibility that savings accounts are meant to provide.

How the revised rates work?

Under the revised framework, savings account balances earn interest as follows:

• Up to Rs 1 lakh: 3 per cent per annum
• Above Rs 1 lakh to Rs 10 lakh: 5 per cent
• Above Rs 10 lakh to Rs 10 crore: 6.5 per cent
• Above Rs 10 crore to Rs 25 crore: 6 per cent
• Above Rs 25 crore to Rs 100 crore: 5 per cent
• Above Rs 100 crore: 4 per cent

These rates are progressive, which means the higher rate applies only to the portion of the balance within that slab, and not to the entire account balance.  ALSO READ | PPF, NSC, SCSS and more: Small savings rates for January-March 2026

 

What progressive interest really means

For example, if a customer maintains a savings account balance of Rs 10 lakh:

• The first Rs 1 lakh earns interest at 3 per cent
• The remaining Rs 9 lakh earns interest at 5 per cent
• Similarly, for a balance of Rs 1 crore:
• Rs 1 lakh earns 3 per cent
• Rs 9 lakh earns 5 per cent
• The remaining Rs 90 lakh earns 6.5 per cent

 

This approach ensures that higher incremental balances earn better returns, without lowering the interest earned on the smaller portions of the balance.

Interest calculation and credit

In line with Reserve Bank of India guidelines, savings account interest is calculated on a daily end-of-day balance and credited to the account on a monthly basis. IDFC First Bank calculates interest on a 365-day basis in non-leap years and 366 days in leap years. The final interest amount is rounded off to the nearest rupee before being credited.

What account holders should keep in mind

The revised rates make IDFC First Bank’s savings account attractive for customers who regularly maintain higher balances, particularly those seeking better returns without locking in their money. However, savings accounts are still primarily meant for liquidity and day-to-day needs.

 

For surplus funds that are not required immediately, investors may consider alternatives such as liquid mutual funds, which typically invest in short-term debt instruments and aim to offer relatively higher returns while allowing quick access to money. Letting large idle balances sit in a savings account may not always be the most efficient use of capital.