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Domestic, NRO & NRE Savings Rate
Effective 28stJune 2025, the interest on your Savings Account has been revised as per the following interest rate structure.
| Balance Slabs | Applicable Rate of Interest w.e.f. 12 st June, 2025 |
|---|---|
| Less than 2000 Cr | 2.50% |
| ₹2000 crores and above | Overnight MIBOR + 0.70% |
The interest is calculated basis incremental balance slabs upto ₹2000 Crs. For balance slabs of ₹2000 Crs and above, flat interest pay out would be applicable on the entire amount.
Apply NowFormula to calculate the Savings Account Interest Rate
The interest accrued on Savings Accounts is computed daily, considering the closing balance. This interest is then credited to the account semi-annually or quarterly, depending on the type of Savings Account and the bank's policy. We follow the law of simple interest to calculate daily interest for a standard Savings Account.
Here is the formula:
Daily Interest = Daily Balance * (Interest /Days in the year)
Let us suppose the balance of a Savings Account is ₹5 Lakhs on a given day and the savings interest rate is 2.50% per annum, the calculation would be as follows:
Daily Interest = ₹5 Lakhs * (2.50/100) / 365 = ₹34.24
Assuming the account maintained a daily balance of ₹5 lakh for a month. In this case, the total interest earned in the entire month would be:
Monthly Interest = ₹5 Lakhs * 30*(2.50/100) / 365 = ₹1027.39
TDS on Savings Account Interest
- Banks don't apply TDS to the interest accrued in Savings Accounts, as per Section 194A of the Income Tax Act. If the interest amount accrued in a Saving Account exceeds ₹10,000, it will be subject to taxation at the marginal tax rate applicable to the account holder. The interest earned from a Savings Account is not treated as an exemption but rather as a deduction.
- As per Section 80TTA of the Income Tax Act, individuals aged 60 years or younger, as well as Hindu Undivided Families, can enjoy an exemption from tax on interest earned up to ₹10,000 in a financial year.
- This deduction applies to interest earned from Savings Accounts with banks, co-operative societies engaged in banking activities, or post offices.
What are the benefits of a Savings Account?
Earning interest
Using a Savings Account allows you to accrue interest on the funds you deposit. Banks provide interest Savings Accounts along with various perks like discounts
Read MoreSecure investment avenue
A Savings Account offers safe and guaranteed returns. While the interest earned is modest, it can add up to a significant amount if you maintain a high balance in your Savings Account.
Read MoreMinimal initial investment
Maintaining a minimum balance in your account is all that's required to continue earning interest.
Read MoreOnline banking facilities
Axis Bank provides online banking services, streamlining the day-to-day management of bank accounts. Through the Axis Mobile app and Internet banking account
Read MoreFacilitates loan acquisition
Holding a Savings Account with a bank can facilitate the process of obtaining a loan, as it establishes a history and relationship with the bank.
Read More
Earning interest
Using a Savings Account allows you to accrue interest on the funds you deposit. Banks provide interest Savings Accounts along with various perks like discounts on locker rentals and unlimited ATM transactions.
Secure investment avenue
A Savings Account offers safe and guaranteed returns. While the interest earned is modest, it can add up to a significant amount if you maintain a high balance in your Savings Account. Simply depositing money into your Savings Account helps to earn nominal interests and keeps your money safe.
Minimal initial investment
Maintaining a minimum balance in your account is all that's required to continue earning interest. The specific minimum deposit requirement may vary from one bank to another and is also based on the Savings Account variant you hold.
Online banking facilities
Axis Bank provides online banking services, streamlining the day-to-day management of bank accounts. Through the Axis Mobile app and Internet banking account, you can seamlessly conduct various transactions such as fund transfers, investing in Fixed and Recurring Deposits, requesting for cheque books, applying for loans or Credit Cards, etc.
Facilitates loan acquisition
Holding a Savings Account with a bank can facilitate the process of obtaining a loan, as it establishes a history and relationship with the bank. This history may make it easier to secure a loan from a bank where you already hold a Savings Account.
Frequently Asked Questions
The interest rate is calculated on the balance maintained in the Savings Account on a daily basis, but it is credited to the account on a quarterly basis (on the first day of the next quarter with the exception of the fourth quarter where the interest amount is paid on the last day of the quarter).
There is no time limit or maturity period for a Savings Account. You will earn interest as long as you maintain funds in the account. Please remember, however, that some Savings Account may require you to maintain a minimum balance. This requirement may differ basis the type of Savings Account you hold and also on whether your Bank branch is in an urban, rural or semi-urban location.
You can earn an interest of 2.50% on your daily current balance of your Savings Account at Axis Bank.
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