A savings account is an integral part of managing your personal finances. However, one question most people have to tackle at some point is just how much money should they keep in their savings account. While having sufficient money in a savings account is essential for day-to-day expenses and having access to funds in time of emergencies, letting a lot of money sit idle is not prudent. Why is that? And what is the solution to this? Let us find out.

Why you should not let your money sit idle in a savings account

While savings accounts do offer interest on the account balance, the rate of interest is quite low, and does not translate into good returns. And one of the biggest keys to building wealth is optimally utilising your money and always putting it to work for you. Letting it sit idle only erodes its value over time.

Hence, consider what is the amount of money you need for three to six months’ worth of your expenses such as rent, utilities, groceries, etc., and any amount above that should not be kept in your savings account.

So, what should you do with the excess money? And what if you put it away in an investment security and then suddenly need to use that money for an unanticipated expense? Here is where Kotak’s Savings Account ActivMoney facility plays an important role.

What is the ActivMoney facility?

The ActivMoney facility in Kotak’s Savings Account is a sweep-in sweep-out facility that allows you to maximise your savings while always having full access to your funds. Any amount above the threshold limit set by you is automatically converted into a Fixed Deposit (FD) to allow you to earn higher interest rates.

The FD created is in multiples of Rs 10,000 and tenure is of 180 days. However, there is absolutely no penalty or fine on pre-mature withdrawal of the FDs that are created through the ActiveMoney facility. This is why ActivMoney’s auto sweep facility in savings account is the solution to utilising your savings in an optimum way to earn returns while maintaining liquidity at all times.

How to open an ActivMoney savings account?

To enjoy the benefits of the ActivMoney’s auto sweep facility in savings account, you simply need to open a savings account with Kotak. The process to open a savings account with Kotak is quick, easy, and completely online. So, you can open your ActivMoney savings account from the comfort of your home through Kotak’s streamlined application process. So, open your account today to enjoy FD-like interest on your savings account balance!

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.