Saving money is important, regardless of your income or lifestyle. Having sufficient funds in a savings account is not only important for day-to-day expenses but also for emergencies. However, just keeping money in your account may not be enough to maximise its value.
While savings accounts do earn interest, the returns are usually modest in comparison to other investment options like Fixed Deposits and mutual funds. This means it’s not wise to let excess money sit idle in savings accounts as inflation may reduce its value over time. Instead, consider how much money you need for your day-to-day expenses and emergencies, and invest the excess.
Investing excess money in the right instrument can help you earn lucrative returns and enhance the value of your savings account. But many of them may lock your money down for an extended period. So, how do you maximise your savings value while maintaining liquidity all the time? ActivMoney savings account offers a solution here, ensuring your idle funds always work for you and earn returns.
Understanding ActivMoney feature
ActivMoney is an auto sweep-in sweep-out facility that helps you maximise your savings while always retaining full access to your funds. Any amount above the predefined threshold limit is automatically transferred into a Fixed Deposit (FD) in multiples of Rs 5,000 for a tenure of 180 days. The amount earns FD-like interest without incurring any penalties for partial withdrawal.
Many auto sweep savings accounts also offer this feature, helping those looking to earn returns without having to lock in their funds for extended periods.
How does ActivMoney enhance the value of your savings account?
Let’s suppose the ActivMoney threshold for your account is Rs. 70,000. Once your savings account balance crosses this threshold, the excess funds will automatically get converted into an FD for 180 days in multiples of 5,000. This FD will earn you interest and add more value to your savings account.
But that’s not all ActivMoney has to offer.
If your savings account balance falls below the threshold, your FD will be automatically used to cover the shortfall. Thus, there’s no penalty or fee for early withdrawals. Just make sure to keep the FD active for at least seven days to earn interest. This gives you complete liquidity and flexibility to manage your finances as per your needs.
How to open an ActivMoney savings account?
To take advantage of its auto sweep facility, simply:
- Visit the website of the bank offering this facility and navigate to the savings account section.
- Now click on open a savings account online. Fill out the online application form by providing your personal information, including your name, address, and contact details.
- Choose the ActivMoney savings account option.
- Submit the application form and wait for the bank to verify your details.
- Once your application is approved, you will receive an email confirming that your ActivMoney savings account has been opened. After that, you will be provided with an account number, login credentials, and other details. You can use these details to access your account online or through the mobile app.
If you already have an account with a bank that offers ActivMoney facility, simply login to your mobile banking app or visit the nearest branch to activate it. Now, don’t rely on regular savings account interest rates, and enhance the value of your savings with FD-like interest through the ActivMoney facility.
