How does ActivMoney work?
Kotak ActivMoney is an auto sweep facility that lets your money work for you by earning FD-like interest on funds you may not be really using for any particular purpose. What’s more, you’ll always have the flexibility to access your funds anytime without incurring any penalty.
When you open a Kotak811 Savings Account online, you can subscribe for ActivMoney and start earning up to 7%* interest p.a. With this facility, the excess amount in your savings bank account, above a predetermined threshold (Rs. 25,000), is automatically transferred into a Fixed Deposit, in multiples of Rs.5,000.
For example, if you have Rs. 30,000 in your Kotak811 Savings Account, and apply for ActivMoney; Rs. 5,000 will be swept-out of your Savings Account into an FD for 180 days at up to 7% p.a. interest. Now, if you deposit more money, the same will apply to the funds over the threshold. Your account balance will be the savings plus the money that goes into the FD, and the interest you’ve earned.
With ActivMoney, you will earn a higher FD-equivalent 7%* interest rate on surplus money in your savings account without compromising on its liquidity. If your savings account balance goes below that threshold, the FD amount goes back to the savings account.
Does the idea of having your money earn more for you with an ActivMoney Savings Account sound good to you? Learn more about how it works and how to apply for an ActivMoney Savings Account.
As mentioned, after you open a Kotak811 Savings Account and activate ActivMoney, any funds in your account over a threshold limit get converted into an ActivMoney FD. As a result, the surplus funds in your account earn a higher interest rate instead of lying idle there. Basically, the amount above a certain limit automatically becomes a fixed deposit and delivers its benefits.
However, ActivMoney offers more flexibility and liquidity than a traditional fixed deposit. If you draw a cheque or want to transfer funds, and your current savings account balance is less than the transaction amount, money from the ActivMoney FD will be sent back to your savings account to honour the transaction. Thus ActivMoney allows seamless money transfer from your FD account into your savings account whenever needed.
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ActivMoney is an extremely beneficial feature for you if you maintain a surplus balance in your account and can give you the help needed to deal with financial uncertainties. While you are not using the extra money present in your account, the auto sweep facility allows you to earn a higher interest rate on it.
How to apply for ActivMoney?
To apply for an ActivMoney Savings Account at Kotak811, you must first open a Kotak811 Savings Account. This can be opened in minutes using video KYC, or a biometric process. You can opt for the ActivMoney fixed deposit facility at the time of opening the account.
You need to subscribe or activate ActivMoney from your Savings Account, you can:
- You can sign up for ActivMoney when you open a new zero balance account online with Kotak811
- Through Kotak Mahindra Mobile Banking by visiting the ‘811 section’ and clicking on ‘Setup ActivMoney.
- Call the customer experience center at 1860-266-0811, talk to a customer representative, and request to activate the ActivMoney feature for your savings account
By default, the FD tenure for a fixed deposit with ActivMoney is 180 days. Even if you withdraw money through the auto sweep facility before the tenure ends, you don't need to pay premature withdrawal penalties. You can get the best of both Savings Account and FD with ActivMoney. So what are you waiting for? Let your money work for you. Apply for ActivMoney today.
Liquidated Dep2 for Rs.25, 000 and liquidated in part for Rs.15,000 from Dep1 to honour the cheque of Rs.40,000 as breaking of FD is done in multiples of Rs.5,000. Dep2 will earn interest for 15 days at the applicable rate without penalty (on LIFO basis) as it exceeds 7 days which is minimum period required to be eligible for interest and Rs.15,000 liquidated from Dep1 would earn eligible interest for 16 days.
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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.