3.5 cr in IDFC Savings – Is it okay?

[Yatin]

I have about ₹3.5 crore sitting in my IDFC savings account, pulling in roughly ₹23 Lakh interest per year.

I usually bank with ICICI/HDFC and only recently opened an account with IDFC First. It looks good, but I'm wondering if it makes sense to keep such a huge amount there just for the extra interest.

Would love any suggestions or opinions!

Thanks!

[Anand]

No, don't keep it there. Move it to an arbitrage fund that offers interim payouts.

[Alok]

It's your money, so the risk is yours. Check out the DICGC under the RBI – it will help you understand how to structure your deposit safely.

[Sangeeta]

Withdraw it right away.

[Payal]

Liquid funds vs. debt funds

[Rekha]

We use a very similar setup for a slightly smaller amount and it works. You can earn around 6.5% (it was 7% until a month ago) on liquid assets. My dad has been doing this for 10 years with banks like Yes, RBL, Equitas.

We treat it like an FD – guaranteed liquidity, no TDS, and monthly interest.

At present there are no structural issues with IDFC, so it's safe. No retail investor has ever lost money on bank deposits in India, and the RBI is unlikely to let that happen.

Arbitrage funds give comparable returns – the category average is about 6.11%, with the better ones delivering 6.7% annualised (roughly 6.5% monthly). They're a bit more tax‑efficient but have liquidity constraints.

If bank interest makes up a large chunk of your earnings, arbitrage funds can be more tax‑efficient than a plain savings account.

[Deepak]

Sir, what business are you in? Please let us know.

[Arisha]

What interest rate are you getting?

[Avni]

That ₹23 L interest looks attractive on paper, but it's fully taxable at your top slab. If you're in the 30% bracket, you'll give about ₹7 L to the government each year, leaving a post‑tax return of barely 4.5%.

I had a client who parked ₹4 crore from a property sale in a high‑yield savings account for zero market risk and instant liquidity. At tax time he paid over ₹8 L just on the interest. We shifted his money to arbitrage mutual funds – they deliver returns similar to an FD or savings account, but because they're treated as equity, the long‑term capital gains tax is only 12.5% after a year. He saved lakhs in tax overnight while keeping the money practically risk‑free.

Also, insurance coverage is only ₹5 L. IDFC is a solid bank, but putting ₹3.5 crore in a single savings account adds unnecessary concentration risk for little real benefit.

[Harish]

I'm not sure, but shouldn't you keep such a large personal saving in a SIB?

[Bhavin]

My IDFC account was completely frozen after I made many transactions.