Have you ever thought about what your money can do beyond everyday needs? It can be your ticket to a better future. This guide is here to help you understand how to make your money grow through smart saving strategies in 2023. We'll explore different ways to save, like special bank accounts and safe investment choices. From regular savings to exciting new options, there's something for everyone. Discover what suits your goals, whether it's buying something soon or planning for the long term. Let's embark on a journey to make the most of your money this year.
Understanding the basics of savings
Alright, let's break down 'savings'. What's that about? Simply put, savings are the funds you choose to put aside, the income you decide not to spend straight away. Think of it like this - you're a farmer, and your savings are the seeds you sow now to reap benefits in the future.
But why should one save? Good point! Savings are your financial armour - they stand by you during unexpected situations, may it be emergencies, a sudden job loss, or even unplanned expenses! Plus, the best money saving plans help you inch closer to your big financial dreams - be it owning a home, launching a business, or ensuring a comfy retirement. They're like a reliable financial ally, always ready to have your back! Having understood the what and why of savings, let's delve into the how - the ways to make your savings work wonders for you. Keep reading!
Types of best savings options
You might be wondering, "So, where do I put my savings?" Glad you asked! Let's walk you through some popular options:
1. Savings accounts:
Think of them as the first stepping stone in your savings journey. Savings accounts are like secure lockers offered by banks to keep your money, with the added perk of earning some interest. You can deposit and withdraw money anytime you want, and even better, they come with a nifty debit card for all your needs.
2. Fixed deposits (FDs):
If you've got a sum of money that you can part with for a while, FDs are your go-to. You deposit this money with your bank for a fixed period (it could be a few months or a few years), and when the term ends, voila! You've got your money plus interest. However, withdrawing before the end of the term could attract penalties.
3. Recurring deposits (RDs):
Picture them as an advanced form of FDs. Instead of depositing a big chunk at once, you save a small sum regularly (every month) over a certain period. Just like in FD, you get back your money plus interest at the end of the term. Great for those who prefer to save bit by bit.
Okay, now let's talk about something even better - Kotak's ActivMoney savings option. This is an automated sweep-in feature linked to a zero balance savings account. Wondering what makes it one of the best saving options? It's all about flexibility and maximised returns! Here's how it works - the money in your savings account exceeding a threshold limit automatically moves into a fixed deposit. This earns you a higher interest rate up to 7%* p.a. than a regular savings account. And the best part? You can still access all your funds anytime you want, without any penalties!
Remember, the trick is to understand each of these options, their advantages and little catches, and choose the one that syncs with your financial needs and goals. Your money can do a lot, my friend, make sure it does!
Must Read: How to Open an Online Savings Account
Best savings scheme in 2023
If you're thinking, "Hey, where should I park my money this year?", then you're in luck! Here's the scoop on the best saving plans for 2023:
1. High interest savings accounts
Banks are getting competitive, and that's great news for you! Some are offering savings accounts with interest rates that beat the average. Look for the ones with the best rates and minimal fees.
2. Flexible fixed deposits
The classic FD is evolving, with options allowing partial withdrawals and additional deposits during the term. It's like the good old FD but with a modern twist.
3. Recurring deposits with Perks
Some RDs these days come with additional benefits like free insurance or bonus interest rates. If you're planning to save a fixed sum every month, keep an eye out for these.
4. Mutual funds (SIP)
If you're willing to take a bit of a risk for potentially higher returns, consider investing in Mutual Funds through Systematic Investment Plans (SIP). A small, consistent monthly investment could yield a lovely profit over time.
5. Government schemes
Look out for schemes like PPF, NSC, and others. These are backed by the government, meaning they're as safe as it gets, plus they offer decent returns.
6. Kotak811's ActivMoney
Remember we talked about this savings option earlier? Kotak811's ActivMoney is all about maximising your returns without compromising on accessibility. Here's a recap of why it's a hot pick:
- Automated Transfers: Money above a threshold of Rs.25,000 in your savings account is automatically transferred to a fixed deposit in multiples of Rs.5,000. You earn high interest of up to 7%* without lifting a finger!
- Flexible Access: Need the money back in your savings account? No problem. It's transferred back without any penalty.
- No Minimum Balance Requirement: Yep, you heard that right. All you need to do is sign up for a zero balance account opening online to activate this plan for you!
- Easy to Use: It's simple to set up and manage online. No fuss, just profits.
7. Real estate investment
If you've got a more substantial sum to invest, real estate is looking promising in 2023. Whether it's buying property or investing in Real Estate Investment Trusts (REITs), it could be a smart move.
8. Gold investments
The allure of gold never fades. You can invest in physical gold or consider Gold ETFs. They're a safe bet and add a golden touch to your investment portfolio.
9. Public provident fund (PPF)
Want to multiply your money and save tax? Look no further than PPF! The interest earned and the returns are not taxable, and it's backed by the government, making it super safe.
10. Mutual funds
If you're willing to take a bit of risk for higher returns, mutual funds could be the best monthly saving scheme. Remember, the higher your risk, the higher your returns. But also, higher the potential loss. Do your research and choose wisely.
11. National savings certificate (NSC)
A small savings scheme backed by the Government of India, NSC offers a safe investment avenue with decent returns.
2023 is shaping up to be an exciting year for savings. Your money's calling, ready to grow, and all these options are waving hello. Just remember, be wise, know your needs, and pick the best route. Happy saving!
Must Read: What Are Different Types Savings Bank Accounts
How to choose the best saving scheme
You might be wondering, "With all these fantastic options, how do I pick the right one for me?" No worries, mate! Here's a quick guide:
1. Your Goals:
Saving for a new phone or a house? Different goals require different strategies. So, set your goal first.
2. Risk Tolerance:
Are you a risk-taker or a safety seeker? Savings accounts and FDs are low-risk, while Mutual Funds have higher risk but potentially higher returns.
3. Time Horizon:
When do you need the money? If it's for a rainy day, consider options that offer quick withdrawals.
4. Liquidity Needs:
Need to access your money anytime? Look for options with more flexibility.
5. Returns:
Lastly, don't forget to compare interest rates or returns. Every extra bit counts!
Final Words
And there we have it - a handy guide to turbocharge your savings in 2023! Remember, whether you're all for the risk or more of a safe haven saver, there's an option out there tailored just for you. So, take a moment, reflect on your goals and dive into the exciting world of savings. It's time your money starts working harder for you. Make 2023 your year of financial growth. Happy saving!
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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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