I park my funds in SBI Max gain home loan account. It doesn’t generate any interest but I end up saving 9% on the home loan interest for amount parked. You can withdraw anytime.
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You can also opt for MOD or sweep in / sweep out in SBI or IDBI, your money gets FD interest rate and can withdraw at any time.
IDFC Bank
Balance in Rs.|Interest Rate (p.a.)
|Up to 1 Lakh|6.00%|
1 Lakh to 2 lakhs|6.50%|
2 lakhs to 10 Crores|7.00%|
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Hi,how does mod in SBI work? Can you withdraw part of the funds?
Yes, it works like regular savings account. You can withdraw and deposit any amount of fund. You have to set a threshold, lets say 25K/10K/50K, as and when your funds reaches above the threshold, funds automatically swept into MOD balance, and every time it creates a difference deposit account.
So eventually you end up having one or multiple deposit accounts underneath your main account with different amounts. As and when you withdraw funds, funds sweep out to your main account with accrued interest from one or more than one deposit accounts.
Its pretty simple, all you have to ask from your branch is to create “mod balance”.
How about RBI 7.75% interest savings bond?
anyone have any experiance with investment in discounted invoices like from kredx or tradecred ?
For the short term, it is better you to invest for [Liquid mutual funds](https://www.etmoney.com/mutual-funds/debt/liquid/57). This is because in liquid funds you will earn 50 percent extra returns what saving accout give you plus you can liquidate easily .
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Idfc , bandhan, equitas bank gives 7% in savings, also new rbi rules makes this safe as now we have insurance up to 5 lacs
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Interest rate in fixed income depends upon the risk one takes with the principal amount.
If some bank is giving higher rate than govt sec, it has to earn a higher rate on the capital to remain solvent. Bond fund giving higher return is taking credit risk investing in low rated bonds.
Principal protection is of paramount importance in fixed income. One should take risk in risky investments like equity where rewards will be proportionate to the risk.
If someone is comfortable with the banks solvency then it’s no problem otherwise one can keep 5 lacs (insured) opening new bank account.
Or change the existing account into flexible deposit account where amount above a certain level will be converted into fixed deposit and if you withdraw then the previous deposit breaks automatically. Interest rate will depend on the bank fd rate.