Why you must open a flexi deposit account and not savings bank account?

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If you have high balances in your savings account, it's best to open a flexi deposit account. What this means is that the surplus amount over an above the stipulated minimum balance would be transferred to a fixed deposit where you earn higher interests, than a savings bank account. You can issue cheques without them bouncing as money could be transferred back by deducting from your Fixed Deposit (FD), while the remaining portion of the FD continues to attract higher interest rates. Here are a few flexi deposits fro leading banks to consider.

K-Flexi Deposit savings account that provides fixed deposit interests

The K-Flexi Deposit savings account helps maximize the returns on surplus funds in the account. The stipulated minimum balance level at present is Rs 10,000. Whenever the balance in the SB a/c surpasses this amount, the excess amount gets transferred to a term deposit in multiples of Rs 5,000 for a specified period and earns interest applicable to a term deposit of that period.

Union Bank’s Flexi Deposit Scheme

Whenever the outstanding balance in the SB Flexi Account reaches Rs 30,000 or more, the excess amount over Rs 20,000, will be transferred to the linked FD Flexi Account as units of Rs 10,000. The system will create a linked Fixed Deposit Flexi Account and transfer to it the surplus funds over Rs 20,000 in multiples of Rs 10,000 [called units]. Any surplus beyond multiples of Rs 10,000 will be retained in the SB Flexi Account.

DBS Flexi Fixed Deposit

The DBS Flexi Fixed Deposit offers higher interest rates with the convenience of a savings account. The Fixed Deposit is made for a minimum amount of Rs10,000 and in multiples of Rs 1,000, subject to a maximum cap of Rs 14,99,999 for a period of 364 days. Interestingly, the fixed deposit gets broken only in multiples of Re 1. The balance in the Fixed Deposit continues to earn interest at the initial contracted rate, to ensure maximum returns. When multiple Fixed Deposits are linked to the Savings account, the last Fixed Deposit created is broken first, to ensure maximum returns.

AB Freedom (Flexi) Deposit Scheme

This is a flexi deposit scheme from Andhra Bank and operates in the same way as mentioned with those of other banks. Any amount in excess of minimum balance is transferred to Term Deposit Account in multiples of Rs1,000 units under Auto Sweep Facility (Minimum No. of Units for such transfer fixed is five i.e., Rs.5,000). The account holder earns interest at domestic term deposit rates for units converted to Terms Deposit. Periodical interest payment will be allowed on quarterly basis.

Read more about: savings, flexi deposit
Story first published: Friday, June 6, 2014, 8:55 [IST]
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