Disclaimer: This article is for general information/education and is not investment advice. The information is shared in good faith and for general informational purposes. The information is shared in good faith and for general informational purposes only. Ujjivan SFB does not make any representations or warranties regarding the accuracy, completeness, or reliability of the content.

June 16, 2026

Effective saving is the need of the hour. At a time when markets look uncertain, you should aim to park your savings cautiously so your wealth growth remains unaffected irrespective of the market outcome. In this blog, we’ve tried to decode how you can maximise your savings to enjoy better returns.  Let’s dive in!

Key Strategies for Splitting Savings

1. Establish a Purpose for Each Account

Assign clear goals to separate accounts, such as emergency funds, vacation, taxes, or short-term purchases, to track progress effectively.

2. Automate Savings Transfers

Set up automated, recurring transfers from your main income account to your savings accounts immediately following payday to treat savings as a top priority.

3. Structure Your Deposit Hierarchy

Break larger, long-term savings into smaller, manageable funds and allocate them into multiple fixed deposit accounts based on your financial goals.

4. Monitor and Review Regularly

Keep records of all account numbers, balances, and due dates in a spreadsheet or personal finance app to monitor for unauthorised activity and ensure goals are met.

Pros of Having Multiple Bank Accounts

1. Better Organisation

Split your money into different accounts for expenses, savings, investments and emergencies. This makes it easier to track and manage your finances.

2. Lower Risk

Spread your money across accounts to reduce risk. If one account has an issue, you can still access funds from others.

3. Higher Returns

Use different accounts to benefit from better interest rates and improve returns on your savings.

How to Utilise Savings Account for Everyday Expenses and Emergency Savings?

Savings accounts form the base for managing daily expenses and emergency funds. Even within savings accounts, the right variant depends on how you use the account.

Interest rates alone should not be your choice. The ideal choice should be based on how well the account supports your day-to-day transactions without any additional charges or high minimum balances. Different variants have different minimum balance requirements, transaction limits and charges which affect the overall benefit of the account.

Choosing a variant that matches your transaction needs can help ensure smoother usage without unnecessary charges.

Create Fixed Deposits for Allocation of Surplus Funds or Planned Savings

Once you set aside money for daily expenses and emergencies, you can allocate your surplus funds based on when you might need them.

If you want to keep surplus funds as an additional emergency cushion or for short-term goals, you can place these funds in short-term FDs. This helps keep the funds accessible while earning a fixed return.

If you do not require the funds for a defined period, you can place them in longer-tenure fixed deposits. If your approach is tax planning, you can also consider tax-saving FDs. These come with a 5-year lock-in, and the principal you invest qualifies for deduction under Section 123 of the Income Tax Act, 2025 (corresponding to Section 80C under the earlier Income Tax Act, 1961), subject to applicable rules.

Keeping funds invested for longer periods allows interest to compound over time. Through compounding, this can lead to higher overall returns. Most fixed deposit variants offer high interest rates for senior citizens, further improving the returns.

For larger deposit amounts, Platina FDs offer higher interest rates compared to regular deposits, subject to applicable terms. 

Worried About Tax Implications on Returns? Here’s What You Should Do

FD returns are taxable and taxed based on your income tax slab. To save tax, you can invest in Tax Saver FDs. Also, TDS is deducted by the bank if your interest income exceeds ₹50,000 in a financial year (for regular depositors) or ₹1 lakh in a financial year (for senior citizens). That said, if your income is below the taxable limit, you can file Form 121  to avoid TDS deduction.

Interest income on Savings Account is tax-free up to ₹10,000 in a financial year. 

To manage and reduce tax on Savings Account interest income you may consider the following:

1. Use Section 80TTA Wisely

Section 80TTA provides individuals and Hindu Undivided Families (HUFs) a deduction of up to ₹10,000 per financial year (only under old tax regime) on interest earned from savings accounts but does not cover Fixed Deposit (FD) and (RD. Senior citizens are not eligible for deductions under Section 80TTA.

2. Use Section 80TTB if Eligible

Section 80TTB of the Income Tax Act provides senior citizens (aged 60 and above) a deduction of up to ₹50,000 per year on interest income. This benefit applies exclusively under the old tax regime and covers interest earned on savings accounts, fixed deposits (FDs), and recurring deposits (RDs).

Reduce Risk With Multiple Accounts

1. Safeguard Your Funds

Using multiple bank accounts improves your financial security by spreading your money across different places. If one account gets compromised, the rest of your funds stay protected, reducing the overall risk.

This approach also gives you piece of mind. Even if one account has an issue, other accounts remain safe, helping you handle the situation calmly without worrying about all your funds.

2. Reduce Risk Exposure

Spread your funds across different accounts to limit risk. Keep a smaller balance in your primary spending account for daily transactions and store larger savings in a separate less frequently accessed account.

Step 1: If you notice suspicious activity, immediately block or freeze that specific amount using your banks app or customer support.

Step 2: Change your UPI PIN and account password to stop further unauthorised access.

Step 3: Report the fraud to your bank and file a complaint with the cybercrime helpline, sharing all relevant details.

Final Thoughts

Managing money across multiple accounts does not have to be complicated. You may get better control of your funds by separating and managing them for everyday use, savings and planned allocations.

Banking products already provide the structure needed for this. The key lies in using each product for a specific purpose. When each account or deposit is assigned a clear purpose, it becomes easier to manage cash flow, avoid unnecessary movement of funds, and make better use of available balances.

Disclaimer:

The contents herein are only for informational purposes and generic in nature. The content does not amount to an offer, invitation or solicitation of any kind to buy or sell, and are not intended to create any legal rights or obligations. This information is subject to updation, completion, amendment and verification without notice. The contents herein are also subject to other product-specific terms and conditions, as well as any applicable third-party terms and conditions, for which Ujjivan Small Finance Bank assumes no responsibility or liability.

Nothing contained herein is intended to constitute financial, investment, legal, tax, or any other professional advice or opinion. Please obtain professional advice before making investment or any other decisions. Any investment decisions that may be made by the you shall be at your own sole discretion, independent analysis and evaluation of the risks involved. The use of any information set out in this document is entirely at the user’s own risk.  Ujjivan Small Finance Bank Limited makes no representation or warranty, express or implied, as to the accuracy and completeness for any information herein. The Bank disclaims any and all liability for any loss or damage (direct, indirect, consequential, or otherwise) incurred by you due to use of or due to investment, product application decisions made by you on the basis of the contents herein. While the information is prepared in good faith from sources deemed reliable (including public sources), the Bank disclaims any liability with respect to accuracy of information or any error or omission or any loss or damage incurred by anyone in reliance on the contents herein, in any manner whatsoever.

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