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How to avail an auto sweep facility in a savings bank account?
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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.
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Savings accounts are a great way to keep your money safe and earn some interest. But traditional savings accounts may not always give you the best returns on your money. That's where auto sweep facilities come in.
Auto sweep facilities allow you to link your savings account to a fixed deposit account. Any money that exceeds a certain limit in your savings account will automatically be transferred to your fixed deposit account. This means that you'll earn a higher interest rate on your money, without having to do anything.
So if you're looking for a way to maximize your returns on your savings, an auto sweep facility is a great option. It's easy to set up and it doesn't cost anything. So why not give it a try?
Auto sweep option in a savings account
Auto sweep facility is a smart feature that enables you as an account holder to link your savings bank account with an FD (fixed deposit) account. When the savings account balance surpasses a pre-determined threshold, the surplus funds automatically are transferred to an FD, which typically provides a higher rate of interest than a regular savings bank account. This way, you can earn higher interest without the need for compromising on liquidity.
What are the benefits of a savings account auto sweep facility?
Higher interest earnings
By transferring the excess money to an FD account, you can earn a higher rate of interest, which is generally more competitive as compared to the conventional savings account interest rate. To earn a higher return using this facility, ensure to confirm the FD rate being offered before the bank account opening process.
Zero penalty on withdrawals
Unlike conventional FDs, the Kotak ActivMoney savings bank account comes with a zero lock-in period. This infers you can access the fund swept into the FD from your savings bank account whenever you need without bearing any penalty.
Flexibility
Auto sweep facility offers the flexibility of automatically converting your surplus savings into FD without any manual intervention. Moreover, the funds come with no lock-in, meaning they can be accessed whenever the need comes up.
Enhanced wealth management
This facility is prudent if you are one of those who maintain a considerable balance in your savings bank account but do not need instant access to all the parked funds.
What are the features of Kotak ActivMoney savings account?
Kotak Bank offers an ActivMoney savings account, which is particularly designed to endow the auto sweep facility benefits. Note that the bank also extends this feature of ActivMoney to its other savings bank account variants such as Grand Savings Account for senior citizens and Kotak Silk Account for women. This permits individuals from diverse demographics to gain the benefit of the auto sweep in feature.
Here are some crucial features of Kotak ActivMoney account –
Attractive rate of interest
The Kotak ActivMoney savings bank account permits you to earn an attractive rate of interest on your FD, comparatively higher than that of a savings account.
Zero lock-in period
The bank account comes with a zero lock-in period, endowing you the freedom to access the funds swept in FD from your savings bank account whenever the need arises, without incurring any penalty.
Default ActivMoney threshold
The Kotak savings account comes with a default threshold of Rs 25,000. In case your savings balance surpasses Rs 25,000, the additional funds are transferred to a 180-day FD in the multiples of Rs. 5,000.
Ending note
Savings account auto sweep facility offered via Kotak ActivMoney and other bank account variants can considerably enhance the thorough returns on your savings while maintaining accessibility and liquidity. By using this feature, you can attain your financial goals with ease.
So, if you are one of those looking for a prudent route to grow your savings, you should opt for the Kotak ActivMoney savings bank account or other Kotak savings account variants offering the auto sweep benefit. Doing so would allow you to smartly manage your money and realise your financial goals before the deadline.
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