Savings Account Interest Calculator
Calculate interest earned on your savings account balance. Daily balance method, quarterly credit. See how much your idle cash earns!
Savings Account Details
₹
Typical balance you maintain%
Bank rates: 2.7% - 4% typicallymonths
How long to calculate interest💰
Enter savings account balance
About Savings Account Interest
Savings account interest is calculated daily on your end-of-day balance and credited quarterly (every 3 months). It's the safest, most liquid investment but offers lowest returns.
Key Features
- Interest Rates: 2.7% - 4% p.a. (regular banks 3%, some digital banks 7%)
- Calculation Method: Daily balance (end of day)
- Credit Frequency: Quarterly (Mar 31, Jun 30, Sep 30, Dec 31)
- Liquidity: 100% (withdraw anytime)
- Safety: DICGC insured up to ₹5L per depositor per bank
- TDS: 10% if interest > ₹10,000/year
How Interest is Calculated
Daily Balance Method:
- Interest = (Daily Balance × Rate × Days) ÷ 365
- Calculated daily on closing balance
- Summed for entire quarter
- Credited on last day of quarter
Example Calculation
Average Balance: ₹1,00,000 @ 3% p.a.
| Daily Interest: | ₹8.22 |
| Monthly Interest: | ₹250 |
| Quarterly Credit: | ₹750 |
| Annual Interest: | ₹3,000 |
Savings Account Interest Rates (2024)
| Bank Type | Rate p.a. |
|---|---|
| Public Sector (SBI, PNB) | 2.7% - 3% |
| Private (HDFC, ICICI, Axis) | 3% - 3.5% |
| Small Finance Banks | 4% - 7% |
| Digital Banks (Jupiter, Fi) | 6% - 7% |
| Post Office Savings | 4% |
TDS on Savings Interest
- Threshold: ₹10,000/year (for all, no senior citizen benefit)
- Rate: 10% TDS if annual interest exceeds ₹10,000
- Form 15G/15H: Submit to avoid TDS if income below taxable limit
- Example: ₹3.5L balance @ 3% = ₹10,500 interest → TDS ₹1,050
- PAN Required: 20% TDS if PAN not linked
Minimum Balance Requirements
- Metro/Urban: ₹5,000 - ₹10,000 (varies by bank)
- Semi-Urban: ₹2,500 - ₹5,000
- Rural: ₹1,000 - ₹2,500
- Penalty: ₹100 - ₹600/month if not maintained
- Zero Balance: Some banks (PMJDY, digital banks)
Savings vs Other Options
- Savings vs FD: Savings 3% liquid vs FD 7% locked
- Savings vs Liquid Funds: Savings 3% vs Liquid MF 6-7%
- Savings vs Sweep FD: Sweep auto-converts excess to FD (best of both)
High-Interest Savings Accounts
- Small Finance Banks: 5-7% but limited branch network
- Digital Banks: 6-7% but app-only, no branch
- Post Office: 4% govt-backed, safe
- Trade-off: Higher rate = fewer branches/services
When to Keep Money in Savings?
- Emergency Fund: 3-6 months expenses (immediate liquidity)
- Short-term Needs: Money needed within days/weeks
- Monthly Expenses: Bill payments, rent, EMIs
- Avoid: Keeping large idle cash (loses to inflation)
Maximizing Savings Interest
- ✅ Maintain higher average balance (not just month-end)
- ✅ Choose bank with higher rate (compare 3% vs 7%)
- ✅ Use sweep-in facility (auto-creates FD for excess)
- ✅ Link PAN to avoid 20% TDS
- ✅ Submit Form 15G/15H if no tax liability
Sweep-in Facility
- Auto-converts balance above threshold to FD
- Example: Keep ₹50K in savings, rest in FD
- Auto-breaks FD if need more cash
- Earns FD rate (7%) on excess, savings rate (3%) on minimum
- Best of both: Liquidity + higher returns
Inflation Impact
- Savings Rate: 3% p.a.
- Inflation: 6% p.a.
- Real Return: -3% (losing purchasing power!)
- Don't keep large amounts: Invest surplus in FD/MF
Pro Tips
- Keep only 3-6 months expenses in savings (emergency fund)
- Invest rest in FD (7%) or liquid funds (6-7%)
- Use sweep-in if offered (free liquidity + FD returns)
- Compare bank rates (7% vs 3% = 133% more interest!)
- Link PAN and submit Form 15G/15H to avoid TDS