Achieving higher interest rates on savings without the rigidity of fixed deposits (FDs) is a financial strategy many aim for but often find challenging to implement. However, with innovative banking solutions like Kotak’s Activmoney, it’s now easier to enjoy FD-like returns on your savings account, combining the flexibility of a savings account with the high interest rates of a fixed deposit. This guide will walk you through the concept of Activmoney and provide practical tips on maximizing your savings account interest rate.
Understanding Activmoney
Activmoney is a facility offered by Kotak Bank that bridges the gap between the liquidity of a savings account and the high interest rates offered by fixed deposits. The service automatically converts the excess balance in your savings account into a fixed deposit, ensuring your idle money earns higher interest. The process is seamless, requiring no manual intervention, making your money work harder for you.
How Activmoney Works
The process starts at the beginning of the month or whenever your salary is credited. After meeting your monthly obligations like EMIs and investments, any surplus amount in your account, typically over Rs 25,000, is automatically swept into multiples of Rs 5,000 into a fixed deposit. This transformation allows your savings to earn interest at FD rates, significantly higher than the standard savings account rate.
Advantages of Using Activmoney
- Higher Interest Rates: Enjoy FD-like interest rates on your savings without locking in your funds for a specific term.
- Liquidity: Access your funds whenever necessary without facing any penalties, a common drawback of traditional fixed deposits.
- Automatic: The sweep-in and sweep-out mechanism operates automatically, ensuring your excess funds are always earning the highest possible interest.
- No Penalty: Withdraw funds from your FD as needed without incurring any penalty, preserving the value of your savings.
Tips for Maximizing Savings with Activmoney
- Maintain a Minimum Balance: Keep a base amount in your savings account to ensure there’s always a surplus ready to be swept into an FD.
- Monitor Your Account: Regularly check your account to understand how much of your savings is being converted and the returns you’re receiving.
- Plan Your Expenses: By understanding your spending patterns, you can better manage the amount left in your account for conversion.
- Review Interest Rates: Keep an eye on current FD rates to ensure you’re getting the best possible returns on your swept-over funds.
Activating Activmoney
Activating the Activmoney facility is straightforward. You can enable it directly from the Kotak811 section on your mobile banking app or by contacting the Kotak customer care center. The activation process is designed to be user-friendly, ensuring that you can start optimizing your savings effortlessly.
Maximize your savings without compromising on accessibility. Watch this video by Kotak811 to learn more about how Activmoney can transform your financial landscape.
Conclusion
In today’s economic environment, making every rupee count is more important than ever. By leveraging facilities like Kotak’s Activmoney, you can ensure that your idle savings are not just sitting there but are actively working to generate more income. It’s a smart financial decision that combines the best of both worlds: the liquidity of a savings account with the high interest rates of a fixed deposit.
