What is maximum interest rate in indian bank?

Bank rates have come down drastically from 10-14% level in 1990-1995 period to present day level of 3.5-7.5% only. So, during the last 30 years that is the change seen. The Post Office rates have also come down in almost the same manner. The interest rates depend on many factors like inflation, economic conditions etc. If someone is offering high interest rate anywhere in the world then one must see its rating and other risks associated with those deposits as in past many frauds had happened where people parked their money in such attractive schemes. One must be very careful in that respect and can go through the list of such defaulters in SEBI or RBI website.

The interest rate depends on the period of deposit and type of account. Generally, nowadays the banks offer the highest rate of 6-7% for a 2-3 years deposit and then both sides these rates taper off. This of course varies from time to time depending on various measures taken by the RBI who is the central agency deciding these things or affecting these things. Some private banks might give slightly more interest rate may be 1-2 % more than the Govt banks. Most of the banks presently are giving a maximum interest of 7.4% for a maximum period of 10 years. If there are apprehensions that the interest rates might fall further then it makes sense to put money there for 10 years.

For senior citizens most of the banks will give a percentage of 0.25 to 0.5% more than the normal rate.

When we look back the previous years (1990 -1994) when the rate of interest for the fixed deposit was substantial higher than the present one currently hovering between 4.5 percent to max 6.5 percent depending upon the tenure of deposit and the type of the bank chosen. In the Nationalised Banks such as State Bank of India, Canara Bank, Union Bank of India, Punjab National Bank etc would offer you somewhat less closely matching the rate of interest as indicated above but some of the private Banks such as Yes Bank, Kotak Mahindra, IDFC etc would oblige you by paying 0.5 percent more than the Nationlised Banks.
However, the rate of interest for the senior citizens in all the Banks is 0.5 percent more than that of other citizens giving them some concessions considering their age factor.
Rate of interest is governed by the rules of RBI examining the different factors such as rate of inflation, market - condition, ease of currency in the market etc.
The rate of interest for Saving Accounts or Current Accounts for most of the Nationlised Banks are around 3.5 percent and 3.0 percent respectively.
It is altogether a different issue if the money saved is invested in some company deposits such as Bajaj Finance, Power Grid Ltd, Nagarjuna Finance for gaining higher levels of interest. The final yield may be attractive but in terms of safety, we may not rely upon these companies.

By keeping our money in the bank we are taking a calculated risk. The bank may not repay the money when we want if it goes bankrupt. To compensate for the risk some interest is given to the depositor. So a part of your interest goes for it. The second point is the risk of inflation. Today the prices are different and after a year the rates may be different. To compensate for this increase in rates, interest is given. Essentially these two factors are to be considered before fixing the rate of interest.
Interest rates are determined mainly based on the following factors.
1. Supply and demand: If there are no people to deposit money in the banks and when there are more borrowers of money, the banks may offer more interest to your deposits, If many people are depositing their money in the banks and there are no borrowers the rate of interest on your deposits will come down.
2. Inflation: Higher the inflation, the higher should be the rate of interest on your deposits. But it is not simple mathematics to calculate proportionately.
3. Government Policies: This is one vital factor. The government has a say in this. Reserve Bank of India will be doing the calculations and announcing the changes in rates from time to time.

Almost all bank are offering the same rate of interest depending on the amounts and the duration. All nationalised banks are giving a maximum of 6.5% ROI. Some private banks are giving up to 7% based on the duration of the deposit.

The interest rates from country to country may differ. This difference is mainly due to the differences in financial situations in the country, the rate of inflation and the policies of the government.

Some financial institutions may be offering a higher rate of interest but the risk factor is very high. We should be very careful in investing in such institutions.

Let me answer your query pointwise of your question raised.
1. Why some countries have high-interest rates? Some countries offer a 25% interest rate. Is that safe to invest in banks that are in these countries?
A: Many countries have high-interest rates but one needs to understand that high-interest rates do not guarantee good returns as inflation in the economy affects those interest rates. One needs to know that it's the real interest that we need to consider while investing in the bank. The real interest rate is the purchasing power of interest that is calculated by regulating the nominal rate charged after keeping the price rises in the report. When inflation increases, the bank will provide better interest rates so that it can encourage its consumers to save and also keep inflation in check.
Some of the countries with high bank interest and inflation rates are as follows:
a) Argentina – 38% Bank Interest & 31.17% - Average Inflation Rate
b) Zimbabwe – 35% Bank Interest
c) Ghana – 20% Bank Interest & 14.79% - Average Inflation Rate
d) Turkey – 19% Bank Interest & 8.58% - Average Inflation Rate
e) Iran – 18% Bank Interest & 17.37% - Average Inflation Rate

2. On what basis is the interest rate in a bank is decided?
A: Monetary Policy Committee (MPC) is the committee that controls the monetary policy which was formed in 2016 as proposed by Urjit Patel Committee in 2015 and fixes the interest rate with focus inflation to 4%, tolerance to 2%, deciding the bank interest rates and adjusting the money supply in the Indian economy. The committee has 6 members out of which 3 members are from the Reserve Bank of India (RBI) and the other 3 members are appointed by the government.
The interest rate in a bank on deposits: The bank interest rates depend on a range of factors i.e. cost of funds & availability of funds which are decided based on the Marginal Cost of Funds based on Lending Rates(MCLR). Now as the MCLR has 4 major factors which help the bank to raise funds for the market and depending upon their ability, different banks may have a different rate of interest. The final deposit rates are made by looking at the repo rate, CRR, and SLR, etc.
The interest rate in a bank on Loans: The interest rates on loans are decided as Marginal Cost of Funds based Lending Rates (MCLR) plus the factors like the scheme, period of loan repayment, the value of the borrower in the market, etc. The banks usually link the lending rates with Repo Rate or a repurchase rate. They add the risk of premium payment with a repo rate to get the final interest rate on loans.
Now, one needs to understand that the rate at which the Reserve Bank of India (RBI) to different banks or the commercial banks is called the Repo rate. RBI always increases or decreases in basis points (bps), where One basis point means one-hundredth of a percentage point.

3. Which bank in India gives the highest interest rate?
A: As we know that every bank gives interest on our savings bank account deposits every quarter but for their ease, they calculate the interest daily. Many of us keep huge amounts in our savings accounts due to our negligence or poor understanding but financial planners or financial analysts do not encourage people to keep huge sums in their savings accounts as it gives very fewer interest rates. They encourage people to invest their excessive amounts in liquid funds as it gives a higher interest rate which in turn provides better returns on our money.
All Banks Savings Account Interest Rates as of April 2021:
For all Savings Account Interest Rates (Per Annum) = 2.75% - 7.25%
All Banks Fixed Deposit Interest Rates:
For Senior Citizens: 3.75% - 7.75% (7 days to 1825 days)
For Regular customer: 3.25% - 5.50% (7 days to 1825 days)