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HDFC Bank has reduced its savings account interest rate from 3 per cent to 2.75 per cent. Several other large banks also offer interest rates below 3 per cent. Given such low returns, savers need to manage their short-term money more efficiently.
Maintain limited balance
A savings account offers convenience. “Premature withdrawal from fixed deposits or redemptions from mutual funds can be avoided,” says Avinash Luthria, Securities and Exchange Board of India-registered investment adviser and founder, Fiduciaries.
However, one should avoid keeping excessive funds in savings accounts. “They should be used mostly to keep running expenses and not as a savings instrument,”
