One account- Functions of three

Published: 12th August 2008
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Some banking products are available in the Indian market offering the unique mixture of liquidity of saving accounts, current account interest rate and the high returns of fixed deposit simultaneously. Different banks have started offering these multi dimensional products.



The banking products available in the Indian market today are many. There are some products which offer you the return of a fixed deposit as well as the liquidity savings account or current account interest rate. You can enjoy the benefits of a savings account coupled with the high returns of a fixed deposit simultaneously. There are plenty of banking products available in the market today to offer you this unique combination . Take the example of HSBC's SmartMoney Account. This account lets you enjoy the higher returns of a fixed deposit but retain the liquidity and flexibility to meet all your financial needs. This account can be opened with a minimum fixed deposit of Rs. 25,000 and once this account is opened you can earn high returns. At the time of need you can withdraw up to 90% through an overdraft facility. In such overdrafts you pay interest only on the amount overdrawn, while earn interest on your fixed deposit.



In case SmartMoney Account You will be charged an interest of 2% over the interest rate being paid on the deposit and the interest rate subject to a maximum of the prime lending rate (PLR). The interest is charged only for the amount utilised as overdraft and for the number of days the customer is in debit. The interest rate on an overdraft limit over Rs 200,000 is linked to the bank's Primary Lending Rate. Like SmartMoney Account the Citibank Multi Deposit is a fixed deposit linked to a savings account and offers current account interest rate. The deposit is held this account is in the units of Rs 1,000. The balance in the Multi Deposit gets added to the balance withdrawn by the customer. While the savings account offers an interest rate of 3.5% on the minimum amount held in the savings account between the 10th and the last day of the month, this account offers customers an typically higher interest rate .



At the heart of this dual facility of liquidity of a transactional account with returns at par with current account interest rate, is leveraging technology to provide convenience to customers. Citibank introduced this facility in the early 90s by booking deposits in small units and offered customers the flexibility of a partial withdrawal. This dual facility comes especially handy for customers who require the use of these funds at short notice. Related financial product is the Citibank Unfixed Deposit. This is a facility that allows an overdraft against a fixed deposit.



In the HDFC Bank's SuperSaver Facility you can also the liquidity of savings account multiplied by current account interest rate. This also gives you an overdraft facility of up to 75% of the value of your fixed deposit amount. You can choose between a savings account or current account to link to your fixed deposit for the liquidity purpose. This facility also gives you the flexibility in altering the tenure of deposit, maturity time and payment instructions, principal amount and rollover mode without any hassle. The senior citizens can enjoy a higher rate of interest on their fixed deposits and for this they have to deposit a minimum amount of Rs. 25,000 for a minimum tenure of six months.



You may not need to break your fixed deposit for short-term needs. You need to withdraw money only for the specific period of requirement. Cash can be withdrawn through an ATM or by cheque or teller transactions at any point of time according to your convenience. When you wish to avoid overdrafts and still want to take advantage of your fixed deposits, then you can opt for these facilities on your savings account. Multiple deposits can also be attached with the savings account.



Please visit our website for more information about current account rate of Interest, fixed deposit term and high interest rate saving accounts.

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