ICICI Bank rolls out online flexible recurring deposit
Private sector major ICICI Bank on Wednesday launched , an online recurring deposit product targetted primarily at young depositors. The bank's savings accountholders can book this variable recurring deposit by logging on to their Internet banking account.
The key benefit is the flexibility offered while making periodical payments. Unlike regular recurring deposits, investors will not be penalised for missing a monthly installment. However, they will have to make up for the missed payments in the subsequent months. In other words, they will have to invest the entire amount they had committed to at the time of booking the recurring deposit.
For instance, say you have decided to invest Rs 8,000 every month over a period of six months. The total investment amount, therefore, is Rs 48,000. However, due to strained cashflows, you are unable to meet your commitment in say the fourth month. In a regular recurring deposit you will have to pay a penalty, but in case of , you will be allowed to skip that month's payment. But, you will have to invest higher amounts in the subsequent months to ensure that you meet the target of Rs 48,000. Also, you need not make payments on a pre-decided date. Depending on your cash flows, you can direct small sums into this recurring deposit on a daily basis, too.
This apart, the product allows depositors to make their goals that friends can contribute towards fulfilling the wish. Put simply, it can be used as a gifting tool.
The minimum duration the depositors can choose is six months, while the minimum amount required to open this account is Rs 500. Like regular deposits, interest rates vary from 6.5% (for six months) to 8.75% (15 months to five years). Interest rates for senior citizens are higher by 50-75 basis points.
Upside: Flexibility in making periodical payments is the key benefit. It will appeal to individuals who stay away from recurring deposits fearing penalties due to missed installments
Downside: The feature of making goals and seeking contributions is being promoted heavily, but offers no tangible benefits. It is low on utility quotient, as friends and family members have access to several other avenues for giving gifts
Soucre : ET
Note : Please contact ICICI Bank for more details
Best Regards
Prakash Nair
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