Kotak Mahindra Bank Limited today announced the debut of its ActivMoney feature, which provides customers with FD-like interest rates of up to 7 per cent p.a. and the flexibility to access their savings at any time! Excess funds in the account that exceed a predefined level are automatically moved into a Fixed Deposit, allowing customers to receive a better interest rate on their investments.
According to RBI data, as of March 2023, the cumulative Savings Account deposit of all scheduled commercial banks in India is Rs 62.9 lakh crore, earning an industry average of 3.5 per cent interest per annum, as opposed to other instruments such as Fixed Deposit, Liquid Funds, and so on, which pay higher interest for a six-month to one-year term. ActivMoney boosts savings account interest income with a 7 per cent p.a. interest rate for 180 days, as well as no premature withdrawal charges that would otherwise apply to a Fixed Deposit, giving the customer the best of both worlds.
Virat Diwanji, Group President and Head, Consumer Banking, Kotak Mahindra Bank said, “Customer centric products and services is at the core of our business strategy. With ActivMoney, we aspire to change the paradigm of savings culture of Indians by offering customers FD wala interest rate on their savings account while retaining the flexibility to access funds anytime without any penalty on foreclosure.”
Rohit Bhasin, President – Retail Liabilities Product and Chief Marketing Officer, Kotak Mahindra Bank said, “Kotak’s ActivMoney fulfils the needs of young, aspirational consumers seeking higher returns on their savings whilst having the flexibility to access funds whenever needed. ActivMoney makes banking more rewarding and enables consumers to use their savings more efficiently and effectively.”
When a customer activates the ActivMoney feature in their Savings Account, it automatically transfers any balance above a certain threshold (specified by the account variety) in multiples of Rs 10,000/- to a 180-day FD with a current interest rate of 7 per cent p.a. If a consumer wants to use the funds, the entire balance in the Savings and FD is immediately available. As a result, a client gets up to 7 per cent p.a. during the time she keeps her savings in an FD through ActivMoney, while the balance in her Savings Account earns 3.5 per cent p.a. 811 and Current Account customers can also use ActivMoney.