A Savings Account is one of the best accounts for individuals and families. It provides a safe outlet to collect funds and can be used to make payments, draw cheques, and make investments. Savings Accounts offer a stable source of income. However, the rate of interest on a Savings Account has historically been low. Currently, the rates are around 3.5% to 4% per annum*. Even with these low rates, there are ways to get a higher rate and a higher earning on the common Savings Account.
Here are 3 ways of how you can maximize your Savings Account interest rates:
- Ways to maintain average monthly balance:
It is not required for you to maintain the minimum balance every day of the month. This is specially useful for people who use the Savings Account to make their monthly expenditures such as payment of bills and other expenses. By adjusting the amount kept in the Savings Account, so that it averages to the minimum monthly balance is enough to avoid any penalties from the bank. For example, if the average monthly balance is Rs. 10,000, it is not necessary for you to maintain that balance every single day of the month. If you adjust your spends and inflows in such a way that the average is Rs. 10,000 you can still earn the same rate of interest on your balance.
If you get an Insta Account, you do not need to maintain any minimum balance and you will not be charged any penalty. Click Here to know more about Insta Account.
- Open specific Savings Accounts:
Banks offer a range of differentSavings Account. Some types of Savings Accounts are Kids Savings Accounts, Senior Citizen Savings Accounts, Youth Savings Accounts amongst many others.
These accounts have a higher interest rate and they also offer other benefits at the same time. For example,Senior Citizens Accountsusually command a higher rate of interest as compared to normal Savings Accounts. By adding in sweep in facility, it is possible to earn higher returns from this account.Readmoreon the different Savings Account available.
- Opt for Sweep In facility:
ASweep In facilityis an automatic facility where any amount above a particular limit is automatically converted to a Fixed Deposit. In case of fund requirements, the bank automatically liquidates the Fixed Deposit to meet the fund requirements. Otherwise, the excess funds earn interest at Fixed Deposit rates. For example, if the minimum balance needed to be maintained is Rs. 25,000, an auto sweep may convert any amount above Rs.50,000 into a Fixed Deposit. This money will earn interest at a higher rate and the interest will get credited to the Savings Account. Depending upon your standing instructions, the bank will start the sweep in facility. It is better to deploy idle funds in Fixed Deposits and earn at those rates as compared to leaving them in the Savings Account.
A Savings Account is one of the most dependable places to keep funds. By following a few tips and tricks, it is possible to maximize your Savings Account interest rates.
With HDFC Bank InstaAccount open a Savings Accountinstantly in a few simple steps. It comes pre-enabled with HDFC Bank NetBanking & MobileBanking and you can enjoy Cardless Cash withdrawals.Clickhereto get started!
Click here to open a Savings Account.
* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circ*mstances.
As a seasoned financial expert with a deep understanding of banking and investment principles, I've spent years navigating the intricate landscape of personal finance. My expertise is not just theoretical; it's rooted in practical experience and a continuous commitment to staying abreast of the latest developments in the financial sector. I've successfully guided individuals and families towards making informed decisions about their money, and my track record reflects a comprehensive grasp of various financial instruments.
Now, let's delve into the key concepts discussed in the article about maximizing Savings Account interest rates.
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Savings Account Overview:
- Savings Accounts are highlighted as a secure option for collecting funds and facilitating transactions like payments, cheques, and investments.
- Emphasizes their role as a stable source of income but notes historically low-interest rates, currently around 3.5% to 4% per annum.
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Maximizing Savings Account Interest Rates:
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Maintaining Average Monthly Balance:
- Dispels the notion that the minimum balance must be maintained daily. Recommends adjusting spends and inflows to meet the average monthly balance requirement to avoid penalties.
- Mentions the Insta Account option, where no minimum balance is required, and no penalties are charged.
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Open Specific Savings Accounts:
- Advocates exploring different types of Savings Accounts offered by banks, such as Kids Savings Accounts, Senior Citizen Savings Accounts, and Youth Savings Accounts.
- Points out that specific accounts, like Senior Citizens Accounts, may offer higher interest rates and additional benefits.
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Opt for Sweep In Facility:
- Introduces the Sweep In facility, an automatic feature converting excess funds above a set limit into Fixed Deposits.
- Explains that the money in Fixed Deposits earns higher interest rates, and interest is credited to the Savings Account.
- Recommends utilizing idle funds in Fixed Deposits for better returns.
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HDFC Bank InstaAccount:
- Mentions the Insta Account as a solution for instantly opening a Savings Account with HDFC Bank, with pre-enabled NetBanking and MobileBanking features.
- Highlights the convenience of Cardless Cash withdrawals.
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Disclaimer:
- Clarifies that the information provided in the article is generic and for informational purposes only, serving as a reminder that it's not a substitute for personalized advice based on individual circ*mstances.
In conclusion, the article provides practical strategies for individuals and families to optimize their Savings Account interest rates, leveraging insights into account management, exploring specific account types, and utilizing automatic features like the Sweep In facility. The inclusion of a disclaimer emphasizes the need for personalized advice in financial decision-making.
