Should I switch salary bank account from HDFC Bank to Kotak Mahindra ?

POSTED BY mundhada ON March 8, 2014 10:39 am COMMENTS (9)

I am a HDFC Bank Classic customer and hold salary account there. I also have there investor account through which i have subscribed to SIPs. Is there a benefit in shifting to Kotak Mahindra back for Salary account as they are offering 6% interest.

Rest of the benefits are almost same. Personal banker , free credit card etc.

9 replies on this article “Should I switch salary bank account from HDFC Bank to Kotak Mahindra ?”

  1. ashalanshu says:

    Dear Mundhana, please check the expense ratio of following 2 funds.

    HDFC Top 200 Growth option Regular plan

    HDFC Top 200 Growth option Direct plan

    You ‘ll know the difference why I’m asking to go directly with AMC (You can invest in direct plan only with AMC)

    Thanks

    Ashal

  2. mundhada says:

    Thanks Ashal. I actually wanted you to elaborate your following statement.

    “Actually more money you can save by shifting your MF investing from HDFC Bank’s ISA to directly with the respective AMCs.”

  3. ashalanshu says:

    Dear Mundhada, when a bank is paying you 6-7% on your SB account, it’s not doing any charity to you. Actually it’s gathering low cost deposit for itself. Please do note to earn 7%, you need to have minimum average daily balance of 1L Rs. in Kotak. Else it’ll be 6%.

    If you feel the associated pain to transfer all your banking transactions as well as investments linked with HDFC account is worth of your money due to this 2% difference, please go ahead and opt for switch over.

    Thanks

    Ashal

  4. mundhada says:

    Ashal , you continue to amaze me with your clarity of thought. Can you please elaborate by way of an example as to what are the hidden costs i may be paying ?

    Thanks

    Sandip

  5. ashalanshu says:

    Dear Mundhada, if the parking is to happen for few days only, the taxation of liquid funds and your SB account’ll be same. The only difference’ll come from 10000 Rs. interest from SB account being tax free under section 80TTA. But do check, based upon your salary credit and expense related debit data, how much more from the 2% you’ll earn? Is it worth of your money?

    Actually more money you can save by shifting your MF investing from HDFC Bank’s ISA to directly with the respective AMCs.

    Thanks

    Ashal

  6. astrosunil says:

    I was having an account with Kotak Mahindra bank & my experience with them was bad – well, this is just my personal experience. I think you must go thru :
    https://www.jagoinvestor.com/forum/which-bank-has-the-best-sweeping-facility
    https://www.jagoinvestor.com/2011/03/auto-sweep-bank-account.html

  7. mundhada says:

    Thanks. Can you provide more details on how the taxation works and some good liquid funds.

  8. Hemanth Chandra says:

    Hi Mundhada,

    If your idea is to get more returns from idle money in your bank account, why to change your salary account bank, instead you can park your money in liquid funds.

    Regards,
    Hemanth.

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