Kotak Mahindra Bank on Thursday announced the launch of its ActivMoney feature which gives customers the benefit of fixed deposit (FD)-like interest rates of up to 7% per annum with no charges on premature withdrawal. Through ActivMoney, excess funds in the account, beyond a defined threshold, are automatically transferred to an FD, thereby offering you the chance to earn a higher interest on your savings. Default minimum threshold over which the surplus funds earn FD like higher interest rate is Rs 25,000 for savings/salary/811 accounts and Rs 50,000 for current accounts.
According to Reserve Bank of India (RBI) data, as of March, the cumulative savings account deposit of all scheduled commercial banks in India was Rs 62.9 lakh crore that earns an industry average of 3.5% interest per annum, as against other instruments like FD, liquid funds etc. which gives them higher interest for a duration of six months to one year. ActivMoney spruces up interest income on the savings account with a 7% per annum interest rate for 180 days as well as no premature withdrawal charges, which are otherwise applicable to FDs.
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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 like interest rate on their savings account while retaining the flexibility to access funds anytime without any penalty on foreclosure.”
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Rohit Bhasin, President – Retail Liabilities Product and Chief Marketing Officer, Kotak Mahindra Bank said, “Kotak’sActivMoney 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.”
Once a customer avails the ActivMoney feature in the savings account, it automatically transfers the balance above the threshold (defined as per account variant) in multiples of Rs 10,000 to an FD of 180 days currently at an interest rate of 7% per annum. In case a customer wishes to use the funds, the entire balance in savings and FD is instantly available.
