How many of you use a savings bank account for just its basic functions? How many of you just log in to complete a money transaction in a hurry and forget all about the small snippets of communication that the bank hopes catches your attention? After you read this article, perhaps you will spend more time on your online account to understand how else you can benefit from your savings account?!
Savings bank accounts are no more unadorned vanilla products. With the rising competition, each bank is now striving to deliver a “little extra” than their counterparts. Banks are now offering several innovative products to their customers that facilitate convenience in banking accompanied by higher return on their deposits. It is important for the customers to be aware of such facilities to enjoy the benefits and maximize the returns on their money. Some of these popular facilities are discussed below:
iWish Deposit from ICICI Bank:
This is a unique feature that lets you save for your wishes through a flexible recurring deposit. This account links your goal/dream with your monetary contributions towards achieving that goal. If you have ICICI Bank’s net banking facility, you can create a goal online and start saving for it. It works like a recurring deposit but with additional features and benefits. For instance: If you wish to buy a car in the coming 2 years and want to save Rs.7.5 lacs for it, then you can simply open an iWish account, create a goal, say, “Buy a Car” and start depositing funds into that account either through auto debit or depositing as per your convenience. You have the choice to manage the iWish account yourself by deciding when and how much to transfer. Even if you do not deposit any funds in a month, there are no penalties or charges and you continue to enjoy the rate of interest applicable on your recurring deposit on the funds available in your account. And if you have extra funds to save, you can also deposit these funds multiple times in a month into your account. Not only this, it also lets you earn better interest rates on your deposits just like a Fixed Deposit.
With ICICI Bank’s iWish account, you can also let your pals know about your goals by sharing these goals on your Facebook page. You can choose to disclose the percentage completion of your goal from time to time. If your family and friends want to help you get closer to your goal, then this account enables them to contribute money to your goal even if they are not ICICI Bank account holders. They, however, need to have a valid VISA Debit Card issued by any bank in India to transfer funds to your iWish account. Beside this, penalty of premature closure of account will be levied on the applicable rate if you choose to close your goal mid-way.
MoneyMaximiser Facility by HDFC Bank:
The MoneyMaximiser facility is also known as automatic sweep out facility. It is available for specific account types like Savings Max account, Kids advantage Account and Women’s savings account. This facility is suitable for those who keep surplus funds in their savings account and are not very efficient at managing their finances. Through this feature, the bank creates a Fixed Deposit in your name and links it with your savings account.
With this facility, you can convert your surplus money into high earning Fixed Deposits (against the regular savings bank interest rate) along with the flexibility of using these funds whenever required (through its sweep-in facility). So you get the best of both i.e. the liquidity of a Savings account and the benefit of higher interest rates. The automated Fixed Deposit booking based on predefined thresholds ensures there is no need to visit or contact the branch to book Fixed Deposits. For instance, if you decide a threshold level of Rs.1,25,000 for your SavingsMax account, then whenever the balance in your Account exceeds/reaches Rs.1,25,000, the amount in excess of Rs.1,00,000 will be put in a fixed deposit at a minimum value of Rs.25,000 for a one year and one day period. In this way, you can earn higher interest on money lying idle in your account.
This facility comes along with sweep-in facility, i.e. if your savings account is short of funds, your Fixed Deposit will be automatically dissolved to meet the short fall. So there are no hassles for any cheque rejects due to insufficient balance in your Savings Account. This facility is, however, available on demand only with the SavingsMax, Women’s Savings account and the Kid’s Advantage account.
This facility is also offered by some more banks and are listed as under:
Bank Name | Sweep-out Facility Name | Unit Size (FD in multiples of Rs.) | Term of deposit |
|---|---|---|---|
| Axis Bank | Encash 24 | 5,000 | 6 months upto a maximum of 5 years |
| ICICI Bank | Money Multiplier | 5,000 | one year or more as instructed by you |
| SBI | Auto-sweep facility | 1,000 | 1 year to 5 years. |
| Kotak Mahindra Bank | Kotak ActivMoney | 10,000 | 6 months & above |
| HDFC Bank | MoneyMaximizer | Re.1 | 1 year & 1 day |
Over Draft Facility by Yes Bank:
Yes Bank customers, who have a term deposit with the bank can also avail an Overdraft facility against their fixed deposit. Till this facility is active, it is not obligatory for the account holders to maintain any minimum balance in their savings account. While earning higher returns on a Fixed Deposit, the customers can also enjoy liquidity by withdrawing funds up to 90% of the fixed deposit value through an overdraft facility. They need to pay interest only on the amount withdrawn and continue to earn interest on 100% of the Fixed Deposit. Their savings account, thus, provides dual benefit of higher interest by creating an FD and added flexibility to use the available funds in the account (through zero minimum balance).
High Yield Savings Account:
Most banks offer an interest rate of 4% p.a. on your savings account. There are however, few banks that offer higher interest rates than the popular rate in the industry. By opening a savings account in those banks, you can shorten the process of earning high while maintaining the liquidity in your hands. Following are some of those banks:
Bank Name | Interest Rate | Conditions |
|---|---|---|
| Yes Bank | 6% - 7% | 6% - for Balance below Rs. 1L; 7%- for balances of Rs.1L and above. |
| IndusInd Bank | 5.5% - 6% | 5.5% - for daily balance below Rs. 1L; 6%- for daily balances of Rs.1L and above. |
| Kotak Mahindra Bank | 5.5% - 6% | 5.5% - for balance up to Rs. 1L; 6%- for balances above Rs.1L |
*Interest rate data as published by respective banks’ website as on Aug 12th, 2014
A savings account is essential for your routine transactions. It enables you to accumulate funds and build up a nest egg over time. By adding the above mentioned features to your account, you can make your savings experience rewarding and convenient.
