5 Tips To Make The Most Of Your Bank Account

A savings account is a prerequisite for being an adult. It is your first step to formalising the fact that your money is indeed your money. It has become such a rite of passage that we scarcely stop to think about it. We take it for granted and never really spare any thought as to how to get the most out of it.

But you’ve got to take advantage of the tech.There have been so many advances in the world of fintech, and it’s all to make your life easier.

5 Ways To Make Best Of Your Bank Accounts

Automatic bill payments

We tend to pay most of our bills through UPI nowadays. There is a lazy person inside most of us, and this alter ego loves the convenience of Google Pay and PhonePe.

You can also set up recurring payments for your phone or electricity payments as automatic bille in your savings account.

You’ll be able to set up auto-debit payments which remove even the manual transaction through UPI.

Flexi FD

Flexi FDs offer all the liquidity and withdrawal benefits of a savings account along with the high interest rate of a fixed deposit. That’s like the best of both worlds. A flexi FD adds a safety net to your account. It is like a buffer or a moat.

Say you have a flexi FD of ₹50,000. There is ₹10,000 in your account. Now, let’s assume you try to make a payment for ₹15,000.

Under normal circumstances, the transaction would be declined.

But, if you have a flexi FD, then the balance amount is taken out from the FD and added to your savings account. This means, your transaction of ₹15,000 would be successful. But, there would now be ₹45,000 in your flexi FD account.

Sweep Accounts

Sweep accounts are generally used in conjunction with flexi FDs. It is an automatic standing instruction. Accordingly, a threshold level is established for your savings account, for instance, ₹50,000. Whenever there is more than ₹50,000 in your savings account, the balance is put into a flexi FD.

This means that if ₹80,000 is in your bank account, by clearing, ₹30,000 will be put into a flexi FD, and the remaining ₹50,000 will stay in your savings account.

High-Yield Accounts

When we say high-yielding account, we mean relatively higher than a normal savings account. The high-yielding rate, in this case, will be at max 1-2% higher than normal.

For example, DCB Bank offers 6% if you maintain an average balance of more than ₹5 lakhs. IndusInd Bank provides up to 6%. Every bank has different offerings, so do remember to complete your due diligence before choosing a bank.

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Free cards

You get access to a lot of free cards — both credit and debit — with a savings account. Of course, the aggressive phone marketing strategies that most of these credit card departments seem to prefer are off-putting, to say the least.

But even then, if you’re interested, you can check out the free credit cards available. You’ll be pleasantly surprised at the features on offer. If you’re not interested in credit cards at all, you can still avail a lot of other benefits through your customary debit card.

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BOTTOM LINE

Under normal circumstances, the interest provided by a savings account is low. In the aftermath of the COVID-19 pandemic, interest rates are very low. If you take into account the high rate of inflation, it is clear that this interest is not enough. We need more.

Now, you can obviously set up your mutual fund SIPs and other investments (investing in stocks) to beat inflation and grow your money.

But that’s still an entirely different instrument. If there are ways that our savings account can make our lives easier, we owe it to ourselves to take advantage. So make sure you make the most of the benefits.

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