IDFC First Bank cuts savings account rates, introduces new balance slabs

Private sector lender IDFC First Bank has lowered its savings account rates and introduced new slabs for small and medium balance categories, effective January 9, 2025, as per its website. The interest slabs and rates for higher balance accounts remain unchanged. Despite the revision, the bank continues to offer one of the highest savings account interest rates in the industry among mid-sized banks.

 

The revision applies to domestic, NRE and NRO savings accounts and follows the bank’s earlier rate structure that was effective from December 17, 2025.

 

The lender has changed the slabs, with the savings rate for balances below ₹1 lakh standing at 3 per cent. Earlier, the savings rate for balances up to ₹5 lakh used to be 3 per cent. 

 

Under the new rates, there has been a new slab, with the savings account rate for deposits above ₹1 lakh to below ₹10 lakh pegged at 5 per cent, and above ₹10 lakh to ₹10 crore at 6.5 per cent. These rates are down from the previous savings account rate for balances above ₹5 lakh to up to ₹5 crore at 7 per cent, and those from above ₹5 crore to up to ₹10 crore pegged at 6.75 per cent.

 

The savings account rate for the remaining slabs — above ₹10 crore to up to ₹25 crore, above ₹25 crore to up to ₹100 crore, and for savings account balances above ₹100 crore — continues to remain at 6 per cent, 5 per cent and 4 per cent, respectively.

 

The reduction in savings account rates is expected to boost the net interest margin (NIM) of the lender. In the second quarter of FY26 (Q2 FY26), the bank posted a 59 basis point (bps) drop compared to the year-ago period in its NIM to 5.59 per cent.

 

Among other mid-sized private sector lenders, IndusInd Bank, Federal Bank and Yes Bank offer interest rates of 2.50 per cent for savings account balances below ₹1 lakh, while Bandhan Bank offers 2.70 per cent. RBL Bank offers a 3 per cent savings account rate for deposits below ₹5 lakh. For other mid-sized deposits of these banks, with savings account balances above ₹1 lakh to up to ₹1 crore, the rates among these lenders range between 2.75 per cent and 5.35 per cent.

 

The credit growth of scheduled commercial banks in the October-December period of FY26 (Q2 FY26) has been healthy due to the positive impact of the Goods and Services Tax (GST) rate cuts. The Reserve Bank of India (RBI) has also reduced the policy repo rate by 125 basis points on a cumulative basis, nudging loan growth. However, deposit growth in the economy continues to be slow.