Retirement is an inevitable part of life that everyone has to go through. While it’s true that you finally get to relax, travel, and do the things you love after years of hard work, you also have to think about managing your expenses. As you grow older, the expenses also tend to increase. Between medical bills, supporting your family, and day-to-day living expenses, it becomes crucial to plan your finances accordingly to avoid financial stress during retirement.

Although there are various investment options available for retirement planning, a savings account can also be an important tool. However, regular savings accounts may offer limited interest rates, which can hinder the growth of your retirement corpus over time. This is where Kotak ActivMoney Savings Account helps.

Its unique auto sweep-in sweep-out facility helps you earn higher interest rates on your savings and ensures that your retirement is well taken care of. Let’s find out how.

1. Automatic savings

With the ActivMoney Savings Account auto sweep facility, any amount above the threshold limit is automatically converted into a Fixed Deposit (FD) for a tenure of 180 days, earning you higher interest rates.

For example, if the threshold for your account is Rs 25,000, any amount above this limit will automatically be transferred to a 180-day FD, and you will earn interest at the prevailing FD rate. Thus, your surplus funds are always invested and earn interest. This feature is particularly useful for those who struggle to save or for those who want to maximise their returns on their savings.

2. Higher interest rates

The fixed deposit rate is much higher than regular savings account interest rates. This enables your retirement savings to grow at a faster rate, helping you accumulate a larger nest egg over time.

The only requirement for earning interest on this savings account is that the Fixed Deposit must be active for at least seven days. There are no other time-bound restrictions.

3. Liquidity and accessibility

With a Kotak ActivMoney Savings Account, you can enjoy the best of both worlds: access to your funds when you need them while saving for your future.

Despite transferring your excess balance into a fixed deposit created for 180 days, you can always access your savings whenever required without any penalty or fine. This ensures you have the liquidity to meet your financial obligations and save for your retirement simultaneously.

4. Structured savings approach

The ActivMoney facility helps inculcate a disciplined savings habit. The excess funds that would otherwise remain idle in a regular savings account are automatically moved into FDs, ensuring that you consistently put your money to work and generate returns that will support your post-retirement lifestyle.

Not only does this feature help you save more effectively, but it also frees you from the hassle of manually transferring funds and deciding on the right investment avenues.

To wrap up

With features like higher interest, easy accessibility, and no penalty on premature withdrawals, the ActivMoney Savings Account can be a useful tool to set aside money for retirement.

You do not have to open a bank account online separately to avail ActivMoney facility. If you are an existing Kotak customer, this facility can be easily activated through its mobile banking app. Just download the app, go to “Service request,” select “Account service request” and click on “ActivMoney.” Now enjoy FD-like interest rates along with several other features of savings accounts and start saving for your retirement today.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.