Private lender IDFC First Bank has revised its savings account interest rates, announcing a reduction across several balance slabs while introducing a new slab structure for depositors. The changes are effective from January 9, 2026, and apply to both existing and new savings account holders.
The revision marks a shift from the bank’s earlier high-yield savings model and is aimed at optimizing funding costs in a changing interest rate environment.
IDFC First Bank will continue to calculate savings account interest on a progressive basis, meaning different portions of the account balance will earn interest at different rates. Under the updated structure, the interest rates are:
Up to ₹1 lakh: 3.00% per annum
Above ₹1 lakh and up to ₹10 lakh: 5.00% per annum
Above ₹10 lakh and up to ₹10 crore: 6.50% per annum
Above ₹10 crore and up to ₹25 crore: 6.00% per annum
Above ₹25 crore and up to ₹100 crore: 5.00% per annum
Above ₹100 crore: 4.00% per annum
The latest revision results in interest rate cuts of up to 200 basis points for certain high-value savings balances.
Customers maintaining lower savings balances are expected to see minimal impact, as rates up to ₹10 lakh remain relatively competitive within the banking sector. However, mid- and high-balance account holders may experience reduced interest earnings compared to the previous structure, where select balances earned up to 7% annually.
The introduction of a broader ₹1 lakh–₹10 lakh slab at 5% simplifies the interest framework while reducing the bank’s overall deposit cost.
The decision aligns with IDFC First Bank’s strategy to improve net interest margins and manage rising funding costs. With deposit competition remaining intense and liquidity conditions evolving, banks are increasingly fine-tuning savings account pricing to maintain profitability.
Analysts view the move as margin-positive for the bank, as savings accounts represent a key component of low-cost deposits.
IDFC First Bank’s rate revision reflects a broader trend in the banking sector, where lenders are reassessing deposit rates following changes in monetary conditions. More banks may adopt similar measures if pressure on margins continues.
Despite the reduction, the bank continues to offer a transparent, slab-based interest structure with daily balance calculation, keeping savings accounts flexible and liquid for customers.
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