How to get more interest in a savings account? Follow these tips!

Like many of us, Raavi had parked her money in a savings bank account. However, the interest earned barely kept up with inflation. She wanted to make her money work harder without taking on unnecessary risks.

Wouldn’t it be great if you also knew how to get more interest in a savings account without sacrificing safety or liquidity? Well, it’s possible! Let's explore some simple strategies that can help you boost your savings account returns.

Tips on how to get more interest in a savings account
 

To increase the income from your savings account, consider the following tips –

1. Find a higher rate of interest online

Not satisfied with the interest offered by traditional savings bank accounts? Many online banking platforms and financial institutions provide a decent rate of interest. If you find a credible bank or financial institution offering a higher interest rate, consider moving your funds there to earn extra interest. But ensure that the maintenance or other additional charges don’t wipe off any savings you make! Explore online for better returns.

2. Utilise your funds effectively with sweep deposits

You can use your savings bank account's sweep-in and sweep-out facility to generate higher interest income from your idle funds. Under this auto-sweep facility, your surplus funds are swept out to a fixed deposit income that automatically yields a higher rate of return. You can sweep the money back into your savings account if you need some urgent cash. The bank also does the same when the money in your regular savings account runs low.

3. Earn directly through regular interest credits

Your banker may provide your savings account with annual, quarterly, or monthly interest credits. If you consider a bank with a frequent interest credit option, you can earn more on your savings account balance. This is because savings accounts use the compound interest rate structure, which works in your favour.

Here, the interest you earn is based not just on deposited principal but on interest collected in earlier periods. Over time, this compounding effect—earning interest on interest—increases your savings interest income.

IDFC FIRST Bank Savings Account provides higher interest up to 7.25% p.a., which is deposited into your bank account monthly.

4. Consider other low-risk investments

If you maintain a decent balance on your savings account, your monthly interest credit can be used for other investment purposes. For instance, you can open a SIP and deposit the monthly interest income. This will ensure that your interest income is used to earn a higher return through actively managed fund schemes.

Key features of savings account interest rates
 

To learn how to get more interest in a savings account and reap maximum benefits, you must understand the characteristics of savings account interest rates.

1. Savings account interest rates are variable

Banks offer different interest rates based on the account balance you maintain. You can maintain a balance that provides the highest returns.

2. Interest compounding frequency

The frequency at which interest is deposited in the account can vary among banks. Some banks deposit interest quarterly, while others may do so monthly. The more frequently interest is deposited, the higher the overall returns for the account holder.

3. Savings account interest rates help customers hedge against Inflation

Savings account interest rates safeguard funds against inflation. While interest rates provide returns, if they do not outpace inflation, the actual value of the money may go down over time. Account holders should consider this to ensure their savings retain their purchasing power.

The bottom line
 

By following these strategies, you can know how to get more interest in a savings account and enhance returns without compromising on safety or liquidity. By being proactive and informed, you can make the most of your savings and achieve your financial goals more efficiently.

Open a savings account with IDFC FIRST Bank today and earn higher interest on your savings. Experience the benefits of zero-fee banking, competitive returns, hassle-free online banking, and much more!

*IDFC FIRST Bank offers zero-fee banking on Savings Accounts, subject to maintenance of the required Average Monthly Balance in the account.  Such services are provided free in good faith, and in the scenario of any abuse, the bank reserves the full right to levy fees according to market standards. All rights reserved.