Ordinary people invariably save a portion of their earnings and look for investment avenues that offer higher interest rates. However, they are often deterred by the risks associated with investments and the concern that funds might not be immediately accessible in an emergency. Consequently, many prefer keeping their money in savings accounts rather than investing it. Some even leave large sums in savings accounts for years due to this apprehension. Yet, most banks offer an annual interest rate of around 4% on savings accounts, with some offering even less.
However, there is a bank—Unity Small Finance Bank—that offers an interest rate of up to 7% on savings accounts. This new rate came into effect on August 1, 2026. Customers wishing to maintain higher balances in their savings accounts stand to earn higher interest here.
**Interest Rates on Unity Small Finance Bank Savings Accounts**
Unity Small Finance Bank has revised the interest rates for its savings accounts, with rates determined by the account balance. Essentially, the more money you keep in the account, the higher the interest you earn, reaching up to 7%.
An annual interest rate of 4.5% applies to balances up to ₹1 lakh. Balances between ₹1 lakh and ₹5 lakh earn 6% annual interest, while balances exceeding ₹5 lakh earn 7% annual interest.
**How Interest is Calculated on Balances Exceeding ₹5 Lakh**
If your savings account balance exceeds ₹5 lakh, you do not earn 7% interest on the entire amount. For instance, if you have ₹6 lakh in your account, you will not receive 7% interest on the full ₹6 lakh. Instead, you will earn 4.5% interest on the first ₹1 lakh, 6% on the next ₹4 lakh, and 7% on the remaining ₹1 lakh. Please note that Unity Small Finance Bank is regulated by the RBI; therefore, your deposits of up to ₹5 lakh are fully secure and insured by the DICGC.
Disclaimer: This content has been sourced and edited from NDTV India. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
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