In order to help customers achieve a higher interest rate on their savings, ActivMoney automatically transfers surplus funds in the account above a predetermined level into a fixed deposit.
According to the Kotak Mahindra Bank press release, “ActivMoney spruces up interest income on the savings account with a 7%* p.a. interest rate for 180 days as well as no premature withdrawal charges which otherwise are applicable to a Fixed Deposit, thereby offering the customer the best of both worlds.”
How it works
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%* 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%* p.a. during the time she keeps her savings in an FD through ActivMoney, while the balance in her Savings Account earns 3.5% p.a. 811 and Current Account customers can also use ActivMoney.Criteria
The default minimal criteria for surplus funds earning higher interest rates from FD wala is Rs 25,000 for Savings/Salary/811 accounts and Rs 50,000 for Current accounts.
Savings account interest rate
| Savings Bank A/c | ||
| Nature | Rate of Interest | |
| For balances upto Rs. 50 lakhs | For balances above Rs. 50 lakhs | |
| A. Domestic (W.e.f. June 13, 2022) | 3.50% p.a. | 4% p.a. |
| B. Non Resident (NRE/NRO) | 3.50% p.a. | 3.50% p.a. |
As per the website, “With effect from 1 April 2016, the periodicity of payment of interest on Savings Bank Account will be quarterly. Thus, the Savings Bank interest calculated on daily product basis will be paid at quarterly intervals on 30th June, 30th September, 31st December & 31st March each year. Note : p.a. is “per annum””
FD interest rates
Kotak Mahindra offers fixed deposit interest rate between 2.75% to 7.20% for tenure ranging from 7 days to 10 years.