With the RBI slashing repo rate by 100 basis points since February, banks have cut savings bank (SB) account interest rates to as low as 2.5 per cent. This has made parking idle funds in SB accounts unattractive. In this backdrop, Jio Payments Bank has brought an innovative feature to its SB account, called Savings Pro. The feature, which can be enabled on KYC-compliant SB accounts of the bank, offers to automatically invest surplus in overnight funds to earn returns of up to 6.5 per cent.
It even has instant withdrawal facility of up to ₹50,000. Read on to find out if you should sign up for Savings Pro and take advantage of higher returns.
What’s on offer?
First to make things clear, Savings Pro is just a feature that works on top of a Jio Payments Bank SB account. Payments bank SB accounts function similarly to regular commercial bank SB accounts. You earn a nominal interest (2.5 per cent in this case), can transact with UPI, make person-to-person payments (IMPS, NEFT, etc.), and also get a debit card. DICGC insurance cover is available and there is also no minimum balance requirement for these accounts.
That said, Savings Pro automatically invests surplus funds in the account, over and above a threshold amount of your choice (minimum ₹5,000), into an overnight mutual fund (although there is no option to choose the fund house currently, the website claims to bring options in the future). However, you can invest only up to ₹1,50,000 on a given day. For instance., if you have ₹2,00,000 in your account and your threshold is ₹30,000, though the surplus is ₹1,70,000, a maximum of ₹1,50,000 will be invested.
When it comes to redemption, you can redeem up to ₹50,000 or 90 per cent of the fund corpus, whichever is less, instantly. For higher amounts, the redemption may take one-two business days to reach your account. Jio Payments Bank doesn’t charge any additional cost for Savings Pro. However, your returns from the fund will be subject to the applicable expense ratios.
What are overnight funds?
Overnight funds are debt mutual funds that dabble in the money market. They invest in debt securities with a maturity of one day. This way, such funds are immune to interest rate risk and are the most secure of debt funds. Their returns depend on the yields in the call money market, which in turn are largely dependent on the level of liquidity in the banking system – higher liquidity would mean lower yields and vice versa.
Overnight funds as a category were introduced in 2018 and most funds saw their NFOs in 2019. The category average 1-year rolling returns over the last five years are given in the chart. As can be seen, the returns can fluctuate widely depending on system liquidity. In 2020 and 2021, when the system was flush with liquidity, funds delivered about 3-4 per cent. Later in 2022, when RBI hiked rates and liquidity normalised through 2024, funds delivered higher returns, even as SB interest rates remained below 3 per cent. Similarly, the curve can be seen moderating downward, reacting to a slew of liquidity infusing measures by RBI this year.
Overnight funds’ returns could be volatile through liquidity cycles. Investors should bake this into expectations as against the company’s claim of up to 6.5 per cent.
Should you go for it?
Though returns from overnight funds often exceed that offered by traditional SB accounts, there are a few factors you need to weigh before you sign up for Savings Pro.
One, Savings Pro will suit idle money such as an emergency fund and will be sub-optimal for goal-based investments, where you very well know the day on which your investment should mature. For e.g., if you need funds for a goal that needs to be met only after a year, there are other instruments such as liquid funds, ultra short duration funds or even FDs with a small finance bank that can give higher returns.
Two, while existing users of Jio Payments Bank can enable Savings Pro in a few steps, it might not be the same for others. Others need to open a new Jio Payments Bank account and complete KYC, before enabling the feature. Since the feature works only when there is a receipt of money (over a user-defined threshold) from time to time, one will have to keep the account active, and it could even entail switching one’s default account for receipt of salary or annuity income. This could mean compromising on the long-standing relationship with your existing bank and even some of the perks your bank gives, because you maintain a higher balance.
It can be argued that one can transfer just the surplus money time to time, from one’s existing account to the new Jio account. All this will need is a quick IMPS transaction on one’s net banking portal/mobile app, to the credit of the Jio account, and voila, the funds will be invested in an overnight fund.
Surely, it would be convenient for someone who is not savvy enough to directly invest in mutual funds. But for the rest, mutual fund apps these days have simplified the process. One who knows his way around an app can invest himself and can even choose from a wide gamut of fund houses, often in the same time it takes to make an IMPS transaction. Some fund houses offer equivalent instant redemption options too.
Three, some banks offer progressively higher rates as the balance in the SB account goes up. Check if your primary bank is one of them. For example, IDFC First Bank offers 7 per cent when balance exceeds ₹5 lakh but 7 per cent applies only on the incremental balance above ₹5 lakh. If your bank happens to be one of them, given the balance you maintain on average, assess whether the option your bank offers, makes more sense than opening a new Jio account and signing up for Savings Pro.
Also, check if your bank’s sweep facility is more beneficial in your case. But sweep accounts come with a few shortcomings which we have written about earlier.
Finally, if you are a high spender and plan on switching your main transacting account to Jio, also know that unlike regular savings accounts, payments bank accounts have a cap on daily balance: ₹2 lakh. This means you cannot have a rupee more than ₹2 lakh in your Jio Payments Bank savings account, at any given point of time.
Published on October 11, 2025
