Banks across the country have started updating their savings account interest rates, offering customers the chance to earn up to 7% interest. This is a significant shift from the earlier rates, which usually ranged between 2.5% and 4%.
With rising competition among banks, many institutions are revising their savings account structures to attract more depositors, giving customers an opportunity to earn higher returns without locking their money in fixed deposits.
Why Banks Are Offering Higher Savings Interest
The primary reason behind the increase in savings interest rates is the growing competition in the banking sector. As customers look for better returns and more flexible options, banks are introducing tier-based savings accounts. These accounts offer higher interest rates based on the balance maintained, allowing banks to reward customers who keep larger amounts in their accounts.
How You Can Get the 7% Interest
To receive the higher interest rate, customers must upgrade to a premium or high-value savings account. These accounts typically provide enhanced benefits and higher interest, especially for individuals who maintain a substantial monthly average balance.
Another option that helps reach the 7% mark is the auto-sweep facility. In this system, any extra amount above a certain limit in your savings account automatically gets converted into a short-term deposit. This allows your money to earn FD-like interest rates while keeping it accessible whenever needed.
What You Need to Do at the Bank
To activate the higher interest benefits, customers simply need to visit their nearest bank branch. A bank official will guide them in upgrading to the appropriate savings account variant. During the visit, customers might be required to complete KYC updates and request the activation of the auto-sweep feature. Once the account is upgraded and the required balance is maintained, the new interest rate will apply automatically.
Who Will Benefit the Most
This revised structure is particularly useful for individuals who keep higher balances in their savings accounts. Salaried professionals, business owners, and senior citizens who prefer liquidity over long-term fixed deposits will find this option especially beneficial. The higher interest rate ensures better annual returns while still allowing easy access to funds whenever required.
How Much Extra You Can Earn
If a customer maintains a balance of ₹2 lakh, the difference is significant. At the earlier average interest rate of around 3%, the annual return would be ₹6,000. But with the new 7% rate, the earnings rise to ₹14,000. This means an additional ₹8,000 in returns without any extra effort.
Final Note
Interest rates and eligibility conditions vary across banks, so it is advisable to check the exact details with your branch. A simple visit and a few formalities can unlock much higher savings returns, making this a highly beneficial update for regular account holders.
