Many still keep a large portion of their money in savings accounts. But with the sharp drop in interest rates recently, that may not be the best idea anymore.

Following the Reserve Bank of India’s 100 basis points cut in key policy rates this year, leading banks have slashed their savings account interest rates.

The State Bank of India (SBI), for example, now offers just 2.5% per year on savings accounts. This is one of the lowest in recent years and makes savings accounts less attractive for people who want to grow their money safely.

Private banks like HDFC Bank, ICICI Bank, and Axis Bank are also offering similar interest rates of 2.75% per year, while only a few small banks like IDFC First Bank are offering higher rates, up to 7%, but that too, only on very large balances.

In most cases, people are earning less than 3% on their savings. It means that money lying idle in a savings account is losing value, especially when the inflation rate is higher than the interest you earn. In simple terms, the money in your savings account may not be able to buy the same goods and services a year from now.