Savings Account Interest Rate: IDFC First Bank has announced a new change to its savings account interest rates, effective January 9, 2026.  The bank has continued its progressive interest rate structure. Under this structure, savings up to Rs. 1 lakh will earn an annual interest of 3%. A 5% interest rate will apply to amounts between Rs. 1 lakh and Rs. 10 lakh. The highest interest rate of 6.5% will be offered on balances from Rs. 10 lakh to Rs. 10 crore. The interest rate will gradually decrease for amounts above Rs. 10 crore.

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What is Progressive Interest?

The progressive interest structure means that a different interest rate applies to each slab. For example, if you have Rs. 10 lakh in your account, the first Rs. 1 lakh will earn 3% interest, and the next Rs. 9 lakh will earn 5% interest. Similarly, for a balance of Rs. 1 crore, the first Rs. 1 lakh will earn 3%, the next Rs. 9 lakh will earn 5%, and the remaining Rs. 90 lakh will earn 6.5% interest. This system is beneficial for account holders with larger deposits, as they receive better returns on their additional funds.

The bank has also stated that interest is calculated on the daily end-of-day balance and credited to the account every month. Interest is calculated based on 365 days in a non-leap year and 366 days in a leap year. The final amount is rounded off to the nearest rupee.

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Furthermore, IDFC First Bank says that these revised interest rates can be particularly beneficial for account holders with higher balances. However, a savings account is primarily considered best for liquidity. For long-term investment of surplus funds, investing in liquid mutual funds might be more advantageous. These funds invest in short-term debt instruments, focusing on capital preservation and potentially offering better returns than a savings account.