Key Changes in Savings Account Interest Calculation with New Uniform Rules



Quick Summary
From 1st January 2026, new rules from the RBI will standardise how interest is calculated on savings accounts. All banks will offer the same interest rate for balances up to £1 lakh, with individual banks setting rates for amounts exceeding this. Interest will now be calculated daily based on the end-of-day balance, rather than the average monthly balance. Furthermore, this calculated interest will be credited to your account every three months, ensuring a uniform system across all financial institutions.

RBI has introduced new deposit rules from 1st January 2026, targeting greater transparency, uniformity and customer protection.

New Savings Account Rules: Interest Calculation Changes
Savings Rule Key Change
Uniform Rate Same rate ≤ ₹1 lakh across banks
EOD Balance Interest on daily closing balance
Quarterly Credit Every 3 months

Uniform Interest Rate Up to ₹1 Lakh Balance

Under this new rule, all banks must offer the same interest rate on savings balances up to ₹1 lakh, regardless of whether it's SBI, HDFC, ICICI or any other bank. Above ₹1 lakh, banks can set their own rates.

For Example

With ₹1,20,000 balance in saving account, up to ₹1,00,000 interest rate will be same, while the remaining interest on ₹20,000 can be decided by bank's chosen rate.

 

Interest Calculated on End-of-Day Balance

Interest on savings accounts shifts from average monthly balance to daily End-of-Day Balance which means now bank will calculate interest only on the balance available at the end of each day.

For Example

Time Transaction Balance
Morning Opening Balance ₹20,000
Afternoon Cash Withdrawal ₹6,000
Evening Cash Deposited ₹2,000
 

Interest to be earned on ₹16,000 i.e., End-of-Day Balance.

Interest To Be Credited Quarterly

Calculated daily interest is credited quarterly in every 3 months - Apr-Jun, Jul-Sep, Oct-Dec, Jan-Mar i.e., 4 times in a year.

This rule will be applicable for all banks.

Earlier, some banks credited interest monthly, half-yearly, or annually. But now there will be only one system - quarterly credit.


The new rules will be effective from 1st January 2026.

Yes, for balances up to £1 lakh, all banks must offer the same interest rate. Banks can set their own rates for balances above £1 lakh.

Interest will be calculated on the end-of-day balance each day, rather than the average monthly balance.

Interest will be credited quarterly, meaning every three months, under the new rules.

The article specifically mentions changes to savings account interest calculation.




About the Author

Finance Professional

I write about Income Tax, GST, TDS, RBI updates, government schemes, and personal finance in India. My focus is on simplifying complex tax and compliance topics into easy-to-understand guides that help readers stay updated with the latest financial rules, investment options, and regulatory changes.

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