October 11, 2025

Savings accounts usually give tiny interest rates, especially on small deposits. Most big banks like SBI, HDFC, and ICICI offer only about 2.5% interest for deposits below Rs 1 lakh. But slice Small Finance Bank is breaking this boring pattern by offering a cool 5.5% interest rate on all savings deposits, even those under Rs 1 lakh. According to Bankbazaar.com, 5.5% is the highest you can find right now for savings deposits below Rs 1 lakh. This is a big deal because many banks have cut down their interest rates after the Reserve Bank of India (RBI) lowered the repo rate by 1% earlier this year. SBI, HDFC, and ICICI still stick to 2.5%, while many others offer 3% or less. But how does slice SFB afford to pay so much? Rajan Bajaj, founder and executive director of slice Small Finance Bank, explains: "As a bank, we earn through lending. Our idle funds stay at or near this risk-free cost of money. When we lend, we earn a spread on top of that. The difference is how we do it. Technology keeps our operating costs low. We’ve learnt how to be efficient from some of the best banks globally and are applying those learnings to India’s unique geography and regulatory framework." The bank proudly offers an interest rate exactly matching 100% of the RBI repo rate, which is currently 5.5% and has stayed unchanged since the September-October Monetary Policy Committee meeting. But here’s a catch: when deposits cross Rs 1 lakh, slice SFB isn’t the top player anymore. Other banks offer up to 8% interest on savings balances above Rs 1 lakh. Here’s a quick look at the best savings interest rates for deposits up to Rs 1 lakh according to Bankbazaar.com: - slice Small Finance Bank: 5.50% - Utkarsh Small Finance Bank Ltd.: 3.25% - Capital Small Finance Bank Ltd.: 3.25% - ESAF Small Finance Bank Ltd.: 3.00% - RBL Bank Ltd.: 3.00% - Ujjivan Small Finance Bank Ltd.: 2.75% - SBM Bank (India) Ltd.: 2.75% - Equitas Small Finance Bank Ltd.: 2.75% - Bandhan Bank Ltd.: 2.70% - Axis Bank Ltd., Yes Bank Ltd., Shivalik Small Finance Bank Ltd., Suryoday Small Finance Bank Ltd., SBI, HDFC Bank, ICICI Bank: 2.50% Why do these rates move like a roller coaster? The RBI repo rate heavily influences bank interest rates. When RBI cuts the repo rate, banks’ cost of borrowing falls, so they usually reduce the interest they pay depositors too. When RBI raises the repo rate, banks might increase interest to attract savers. A bit about slice Small Finance Bank: It used to be called North East Small Finance Bank but changed its name to slice SFB in May 2025. This bank is fully digital, and you can open its savings account right from your smartphone using their app. Tracking your earnings and managing your account is super easy with them. So, if you want a savings account that truly rewards you for keeping your money, slice Small Finance Bank might just be your new best friend, especially if your deposit is under Rs 1 lakh!

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Tags: Slice small finance bank, Savings account interest rates, Rbi repo rate, Bank interest rates, Small finance banks, Digital banking,