🔴 మీsavings A\C లో డబ్బులు పెట్టకండి|🤑 Best BANKING Techniques to Double Your Money

Summary

In this video, Sai Krishna Patri highlights how banks are continuously reducing savings account interest rates, leaving account holders at a disadvantage. He introduces five alternative products that offer better returns, such as overnight and liquid funds with instant access, flexi deposits, arbitrage funds, and overdraft home loans. These alternatives not only provide higher interest but also offer greater flexibility, allowing for easy withdrawal when needed. The video aims to raise awareness about these products, encouraging viewers to move their funds out of low-interest savings accounts to maximize their returns while maintaining liquidity for emergencies.

Takeaways

• 😀 Banks are reducing interest rates on savings accounts, and many people are unaware of the significant impact this has on their savings.
• 😀 The interest rate on savings accounts in major banks like SBI and ICICI has drastically decreased from 2.7% to 7%, leading to a loss of potential earnings for account holders.
• 😀 People who maintain emergency funds in savings accounts are losing out on significant interest, which can be as much as ₹16,000 per year for ₹50,000 in monthly expenses.
• 😀 There are alternative financial products like cooperative banks and mutual funds that can offer better interest rates compared to savings accounts.
• 😀 Overnight funds and liquid funds are examples of alternative products that offer interest rates of 6.5% to 7%, much higher than the typical savings account rates.
• 😀 With products like overnight and liquid funds, individuals can earn extra interest (up to ₹40,000 more for ₹5 lakh) with minimal effort and instant access to their funds.
• 😀 Mutual funds, especially liquid funds, come with an 'instant access facility,' allowing withdrawals within 30 minutes, providing flexibility similar to a savings account.
• 😀 Flexi deposits offer better interest rates than savings accounts (up to 7%), but they are subject to lock-in periods like 30, 60, or 90 days.
• 😀 Arbitrage funds offer returns of 7% to 8%, with tax advantages, particularly for investors in higher tax brackets, making them a better option than a savings account.
• 😀 Products like overdraft loans on home loans allow individuals to park extra money and reduce interest costs on home loans, leading to savings over time.

Q & A

Why are banks reducing the interest rates on savings accounts?

Banks are continuously reducing interest rates on savings accounts to boost their own profits. As a result, customers are receiving lower returns on the money parked in savings accounts.

How much has the interest rate on savings accounts been reduced by major banks like SBI and ICICI?

Banks like SBI and ICICI have reduced their interest rates significantly, for example, SBI reduced its interest rate from 7% to 2.7%, and ICICI has made similar changes.

What is the impact of these interest rate cuts on people who have parked large amounts of money in savings accounts?

The reduction in interest rates means that individuals who have large amounts of money in their savings accounts are losing a significant amount of interest income. For example, a person previously earning ₹24,000 in interest may now earn ₹8,000 less due to these cuts.

What are alternative products to savings accounts that offer better interest rates?

Alternatives to savings accounts include overnight funds, liquid funds, flexi deposits, arbitrage funds, and low-duration funds, which provide much higher interest rates than traditional savings accounts.

What is the 'Instant Access Facility' in mutual funds, and how does it benefit investors?

The 'Instant Access Facility' allows investors to withdraw up to ₹50,000 within 30 minutes or 90% of their fund value, providing quick access to funds without waiting for several days as in the case of traditional mutual funds.

How do overnight and liquid funds compare to savings accounts in terms of returns?

Overnight and liquid funds typically offer returns ranging between 6.5% to 7%, significantly higher than the interest offered by savings accounts. For instance, ₹5 lakh invested in these funds could earn ₹67,000 in interest, compared to a much lower return from savings accounts.

What is the tax advantage of investing in arbitrage funds compared to other types of funds?

Arbitrage funds are taxed under the equity tax system, which is generally more favorable than the debt tax system used for other types of funds. This means that investors in arbitrage funds may enjoy lower tax rates on their returns.

What are the benefits of investing in flexi deposits?

Flexi deposits offer relatively higher interest rates (5.5% to 7%) than regular savings accounts, and they also provide more flexibility in terms of withdrawal, although they require a certain holding period (e.g., 30 to 90 days).

How does investing in low-duration and ultra-short term funds benefit investors, especially with potential interest rate cuts by the RBI?

Low-duration and ultra-short term funds typically offer returns between 7% to 8%, which are higher than traditional savings accounts. If the RBI reduces interest rates further, these funds could provide even better returns, making them an attractive option for investors.

What is the advantage of using an overdraft loan account instead of keeping money in a savings account?

Using an overdraft loan account allows individuals to earn higher interest on their deposited money (e.g., 8.5%) and reduce the interest they pay on their home loan. This is more advantageous than keeping money in a savings account, where the interest rate is much lower.