Emergency Fund Account with High interest rate on SB & FD

[kjs]

Hello Members,

I am looking to open emergency fund account with high interest rate on saving account and FD.

I have shortlisted 3
- AU Small Fin
- RBL Bank
- IndusInd Bank.

Preference: 0 balance.

Note : I will keep adding all extra fund in this account every month and do FDs and some idle amount in account. I have
ICICI salary account 0 bal by default and
hdfc 0 bal which i use for investment & Credit card bill payment.
BOB for UPI Transactions.

Also there should be an option for auto Rewenal for FD'S.

I am open to suggestions if better options apart from mentioned above 3

 

[avishj]

Hello Members,

I am looking to open emergency fund account with high interest rate on saving account and FD.

I have shortlisted 3
- AU Small Fin
- RBL Bank
- IndusInd Bank.

Preference: 0 balance.

Note : I will keep adding all extra fund in this account every month and do FDs and some idle amount in account. I have
ICICI salary account 0 bal by default and
hdfc 0 bal which i use for investment & Credit card bill payment.
BOB for UPI Transactions.

Also there should be an option for auto Rewenal for FD'S.

I am open to suggestions if better options apart from mentioned above 3

Best option would be IndusInd in terms of stability. Even though we are covered to 5L in deposits, that money takes time to come unlike just a weekend it took for SVB holders to get their 250K. IndusInd has good offers for NMC waived accounts throughout the year. Open the highest tier possible, like Exclusive. Their FDs do have option to auto-renew, currently sitting at 7.75%.

 

[avishj]

CRED MINT @ ~ 9% short term or account at IDFC FIRST

For 1-2% extra, you are really risking your money, which doesn't make much sense to me, plus withdrawals are not always instantaneous with CRED Mint, beware. IDFC First is also a good option, but IndusInd gives better rates and 0 balance is easier to get in IndusInd.

 

[avishj]

Hi,
For Emergency Fund, one can keep the amount in various debt MF. returns would be in the range of 6-8%. Liquidity issue is there as one would receive fund on T+1 day. Hence a combination of MFs & FDs is a better choice.

This is a good option, maybe a split of debt MF + IndusInd / IDFC can be considered. But a point to note is that current FD rates are higher than MF rates, and MF has no indexation unless 35%+ in equity after the change in rules recently, hence that's a point to consider as well.

 

[avishj]

My opinion:

Requirements:
1. Emergency funds must be easily accessible
2. Emergency funds must be "safe".

RBL Bank has higher rates perhaps because there was negative news about it in the recent past, so I am not sure it meets Requirement # 2 for a long term "deposit and forget about it" approach. See for example, this article.

IndusInd Bank has good rates but the quality and reliability of internet banking is quite low. I am not sure it meets Requirement # 1.
Same is the case with SBM Bank India (pathetic quality of internet banking, but high rates)

AU Small Finance Bank seems to have decent internet banking, but I am not sure it meets Requirement # 2. Also the number of branches is not that high, so even accessibility is not fantastic if we also consider physical branches.

My suggestion is to not chase returns for your emergency funds. Unluckily, and I wish that does not happen, but if there is an emergency in which you are the victim and are not able to perform financial transactions, the funds must be available easily. Go to the nearest branch of ICICI / HDFC / SBI / Axis and open the account there.

Axis is notorious for fees / deductions from account balance, but it also has this feature where if the FD tenure is more than 2 years, if you prematurely break FD after 15 months, no penalty is charged. That could be useful for this use. Axis rates are also usually higher than ICICI / HDFC / SBI.

ICICI, HDFC, SBI and also probably Axis also offer a facility of auto sweep-in and sweep-out where FD is automatically created if savings account balance crosses a threshold, and automatically broken (closed) if withdrawal / transfer of an amount higher than the savings account balance is performed. Very convenient for emergency use.

Very good points raised here, but small addition, IndusInd NB is not great but functional, but their mobile app is pretty smooth. Among the other banks mentioned HDFC also suffers from a bad NB, but has a decent app. Axis & ICICI have great apps, Axis NB > ICICI NB imo.

 

[alphamagnus]

Isn’t DBS savings the best? About 6% interest. Full liquidity!

 

[RupayMan]

Isn’t DBS savings the best? About 6% interest. Full liquidity!

6% from which amount?

 

[alphamagnus]

DBS Bank Savings Account
Up to Rs 1 lakh	3.25%
Above Rs 1 lakh and up to Rs.2 Lakhs	3.50%
Above Rs.2 Lakhs and Upto Rs.3 Lakhs	4.25%
Above Rs.3 Lakhs and Upto Rs.5 Lakhs	7.00%
Above Rs 5 lakhs and up to Rs.10 lakhs	6.00%
Above Rs 10 lakhs and up to Rs.20 lakhs	5.50%

 

[RupayMan]

DBS Bank Savings Account
Up to Rs 1 lakh	3.25%
Above Rs 1 lakh and up to Rs.2 Lakhs	3.50%
Above Rs.2 Lakhs and Upto Rs.3 Lakhs	4.25%
Above Rs.3 Lakhs and Upto Rs.5 Lakhs	7.00%
Above Rs 5 lakhs and up to Rs.10 lakhs	6.00%
Above Rs 10 lakhs and up to Rs.20 lakhs	5.50%

This is like Income tax range.. Small PSU banks are way too simpler, like Jana bank, above 1 lakh 7%

 

[kjs]

Best option would be IndusInd in terms of stability. Even though we are covered to 5L in deposits, that money takes time to come unlike just a weekend it took for SVB holders to get their 250K. IndusInd has good offers for NMC waived accounts throughout the year. Open the highest tier possible, like Exclusive. Their FDs do have option to auto-renew, currently sitting at 7.75%.

Read some twitter comments related to IndusInd , once ur no is registered in their system you are flooded with so many spam calls almost on daily basis .Never issue with my current ICICI & Hdfc ..

 

[ramirami]

Very good points raised here, but small addition, IndusInd NB is not great but functional, but their mobile app is pretty smooth. Among the other banks mentioned HDFC also suffers from a bad NB, but has a decent app. Axis & ICICI have great apps, Axis NB > ICICI NB imo.

IndusInd NetBanking has fewer features but is sometimes also too slow to be usable. On the other hand, HDFC has never been unusaby slow for me.
HDFC is not as feature-rich as ICICI or Axis, but it has more features that IndusInd. For example, you can buy RBI Floating Rate Savings Bonds through HDFC net banking.

IndusInd "system" is often unreliable for its employees as well - I've had to wait for more than half an hour at the bank because their system was too unresponsive to be usable by them!

Another secondhand anecdote that a family friend told: IndusInd stopped crediting the monthly interest for one particular FD. This person visited the bank to enquire. Nobody could help for 20 minutes because their system was not responsive. Then the employee sent details to some other team / senior over WhatsApp, who replied over WhatsApp with a screenshot / photo of his screen. Both employees had no respect for any data security norms. They vaguely mentioned some lien. After pressing further, referred to some other employee who said there is no lien. Then after a while the bank flip-flopped and said there was a lien and it was for TDS recovery. They had placed a lien for TDS of all FD accounts on only one FD account without informing the customer. The logical thing here was to inform the customer in some manner or recover the TDS from savings account, but no, they did not do that.

 

[avishj]

IndusInd NetBanking has fewer features but is sometimes also too slow to be usable. On the other hand, HDFC has never been unusaby slow for me.
HDFC is not as feature-rich as ICICI or Axis, but it has more features that IndusInd. For example, you can buy RBI Floating Rate Savings Bonds through HDFC net banking.

IndusInd "system" is often unreliable for its employees as well - I've had to wait for more than half an hour at the bank because their system was too unresponsive to be usable by them!

Another secondhand anecdote that a family friend told: IndusInd stopped crediting the monthly interest for one particular FD. This person visited the bank to enquire. Nobody could help for 20 minutes because their system was not responsive. Then the employee sent details to some other team / senior over WhatsApp, who replied over WhatsApp with a screenshot / photo of his screen. Both employees had no respect for any data security norms. They vaguely mentioned some lien. After pressing further, referred to some other employee who said there is no lien. Then after a while the bank flip-flopped and said there was a lien and it was for TDS recovery. They had placed a lien for TDS of all FD accounts on only one FD account without informing the customer. The logical thing here was to inform the customer in some manner or recover the TDS from savings account, but no, they did not do that.

I agree. Sometimes IndusInd is unreliable, but that's been rare and my experience with them has been good overall. And yes I believe that anecdote. During my mother's account opening, since IndusInd allows you to choose your account number, the lady suggested using another bank's account number for simplicity. Knowing that the initial funds would be coming from Axis via the chequebook, she had found out my mother's account number from Axis via a Whatsapp to a friend who worked there. Was absolutely shell shocked.

 

[gauravraj]

I agree. Sometimes IndusInd is unreliable, but that's been rare and my experience with them has been good overall. And yes I believe that anecdote. During my mother's account opening, since IndusInd allows you to choose your account number, the lady suggested using another bank's account number for simplicity. Knowing that the initial funds would be coming from Axis via the chequebook, she had found out my mother's account number from Axis via a Whatsapp to a friend who worked there. Was absolutely shell shocked.

If it's true , then where the privacy ? They can check all personal info and balances.

We should not use axis as main account.

for me and @Wealth is my birth right! 750 ke voucher ka benefit heavy na ho jaye.

 

[Zacobite]

Hello Members,

I am looking to open emergency fund account with high interest rate on saving account and FD.

I have shortlisted 3
- AU Small Fin
- RBL Bank
- IndusInd Bank.

Preference: 0 balance.

Note : I will keep adding all extra fund in this account every month and do FDs and some idle amount in account. I have
ICICI salary account 0 bal by default and
hdfc 0 bal which i use for investment & Credit card bill payment.
BOB for UPI Transactions.

Also there should be an option for auto Rewenal for FD'S.

I am open to suggestions if better options apart from mentioned above 3

Now that we have all. managed to give you more options than you asked for and added to your confusion, let us know what you finally decided LOL

 

[kjs]

Now that we have all. managed to give you more options than you asked for and added to your confusion, let us know what you finally decided LOL

I will go with SBI will activate Auto Sweep & transfer extra from ICICI account every month & keep Union Bank for FD. I Wanted to open Indusind for FD as ROI is highest amongst reputed banks , but saw their twitter handle , they are harassing people with so many spam calls which is very annoying , also I observed in Future if we want to take OD against FD in Private banks its +2% of FD ROI but in Union Bank it is +1% of FD ROI which is also a factor be to considered & this should be similar for all Govt Banks. Union bank anyways provides 7.30 % as their highest ROI on FD compared to 7.75% of IndusInd

 

[avishj]

If it's true , then where the privacy ? They can check all personal info and balances.

We should not use axis as main account.

for me and @Wealth is my birth right! 750 ke voucher ka benefit heavy na ho jaye.

Yeah, there indeed is no privacy whatsoever.

 

[4jj]

Read some twitter comments related to IndusInd , once ur no is registered in their system you are flooded with so many spam calls almost on daily basis .Never issue with my current ICICI & Hdfc ..

Thats true, Indsund bank will ruin your life by spamming you, don't even think about there credit card, it is a total scam, they push for certain card variant in a campaign and after that they devalue it. The rewards system is so terrible you would end up let go of the reward points.

 

[kjs]

Thats true, Indsund bank will ruin your life by spamming you, don't even think about there credit card, it is a total scam, they push for certain card variant in a campaign and after that they devalue it. The rewards system is so terrible you would end up let go of the reward points.

Yes.. definitely no time to fight for silly and small cashbacks .. Nothing is free ..They will try to get something from you..its better to be with top 5 ..there is a reason they are there

 

[hs23]

I checked

Kotak ActivMoney is interesting - there is no premature withdrawal penalty, and sweep from savings to FD occurs every day. The catch is that the duration is fixed at 180 days, so if you ever need to sweep from FD to account, the effective duration will necessarily be lower than 180 days. For 180 days, Kotak's rate today is 6.5% but or any lower duration, it is max 4.25%, which is quite a drop. I think Kotak calls it "no premature withdrawal penalty", but even without penalty, the rates for smaller duration are not very good.

I looked at Kotak, SBI, HDFC, Axis, ICICI again right now and Axis seems to be the best compromise overall. But if you want to avoid Axis, I think I'd choose SBI over Kotak.

If there is no emergency, SBI 2-3 year duration will give 7% compounded quarterly, or 5 year duration will give 6.5% compounded quarterly.
Kotak will give 6.5% compounded 6-monthly.
So winner is SBI.

If there is an emergency, Kotak will give max 4.25%.
SBI will give 2.5% if it happens within 5 days, 4% if within 179 days and 4.75% or higher if it happens any time later, going to 6.5% for 2-3 Y and then 6% for 5Y.
If you book a long duration deposit, say 5 years, you get better returns with SBI if the emergency happens any time after the first 6 months. So for 4.5 years, SBI returns are better, for the first 6 months, Kotak returns are better. I'd call it a win for SBI.

If you choose SBI, I think auto sweep from savings to FD (Savings Plus) could be avoided and manual creation of MOD at the best rates will be better.

I think we are almost at the end of the interest rate hike cycle and the rates will start decreasing in the near future. So, in my opinion, locking a good rate for a large duration, either now or in the next few months could give the best returns.

Thanks for explaining how this works - DCB charges 0.50% pre closure penalty. I have DCB bank in my building itself. Is this a better option then IDFC?

 

[kjs]

I checked

Thanks for explaining how this works - DCB charges 0.50% pre closure penalty. I have DCB bank in my building itself. Is this a better option then IDFC?

Doesn't make much difference. Ideally we should keep an account for autosweep that is not used much (less debit transactions) where you want to park your idle money and not use it unless emergency. I am using Kotak 811 & its good

 

[Lobogris]

Hello Members,

I am looking to open emergency fund account with high interest rate on saving account and FD.

I have shortlisted 3
- AU Small Fin
- RBL Bank
- IndusInd Bank.

Preference: 0 balance.

Note : I will keep adding all extra fund in this account every month and do FDs and some idle amount in account. I have
ICICI salary account 0 bal by default and
hdfc 0 bal which i use for investment & Credit card bill payment.
BOB for UPI Transactions.

Also there should be an option for auto Rewenal for FD'S.

I am open to suggestions if better options apart from mentioned above 3

Go with Fincare or Equitas if available near you. 7% to 7.25% savings interest and 8.5% on FDs.