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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.
Consider a situation in which you maintain all of your savings in an account you can access whenever you need to. While having high liquidity may give you peace of mind, it is also preventing you from earning higher returns on your money.
Imagine a situation where you just retained enough money in your savings account to fulfil your monthly costs and utilised the rest of your money to invest in mutual funds, stocks, etc. While you may feel satisfied that you utilised your money wisely to produce great returns, you might not have the quick access you need if an unexpected expenditure, like a car repair, arises.
Can't decide between high liquidity and earning higher returns on your savings? Kotak's ActivMoney Savings Account offers an auto-sweep facility that invests your excess funds in FD like instrument, while ensuring full access to your money.
So what is the most financially responsible course of action? How can you invest your money while preserving the necessary liquidity? The ActivMoney facility from Kotak is the solution. The auto-sweep feature ensures that your money is always available to you and that it never sits idle.
How does the ActiveMoney facility work?
You can set ActivMoney during or after opening an offline or online savings account with Kotak, there is a threshold limit established for your savings account balance, let's assume it is Rs. 25,000. The excess funds will now automatically be converted into fixed deposits (FDs) in multiples of Rs 10,000 the instant your savings account balance crosses Rs 25,000.
The FDs created through ActivMoney are made for a tenure of 180 days. However, you can withdraw the funds at any time you like without having to pay a premature withdrawal penalty. Hence, you maintain complete liquidity of your funds. The only thing you need to keep in mind is that the FD needs to be active for a minimum period of seven days in order to earn interest. Other than that, there are absolutely no time-bound restrictions.
Another benefit of the ActivMoney facility is that it works the other way too. So, if your savings account balance falls below the threshold limit, Rs 25,000 in case of the above example, your FD will automatically be liquidated and the money will be transferred to your savings account. This is to ensure that you always have the money you need in your savings account.
Open ActivMoney Savings Account for the best of both worlds
To earn high returns while maintaining high liquidity, open your Savings Account with ActivMoney facility today and enjoy the best of both worlds! The bank account opening process is completely online and is streamlined so that you don’t face any issues or take a lot of time. Open your account today!
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