e Flexi Deposit Account from SBI, is a good way of generating returns from regular savings. It offers very convenient features and is backed by safety and security.
Here is quick review of the e SBI Flexi Deposit Account
First, we need to understand that there is a difference between the e Sbi Flexi Deposit Account and a normal recurring deposit. In the latter, your amount is chosen, while in the case of the former, you can choose any amount. In fact, you can vary the amount.
The maximum tenure that is permissible by State Bank of India is 7 years, while the minimum permissible tenure is 5 years. So, remember that this investment is more of a long term in nature.
All residential individuals are allowed to invest in this scheme, which means that it is not available for Non Resident Indians.
Senior citizens are also entitled to open an account, and there is a nominee facility that is also available. You can get your savings or current account debited to open the given account.
Interest rates on the e SBI Flexi Deposit Account
The interest rates on e SBI Flexi Deposit Account is the same as that is currently applicable for term deposits issued by State Bank of India.
At the moment the interest rate on the SBI Term deposit is just about 7 per cent for tenures ranging from 3 years to 10 years. This is not the best interest rate and along with a tax liability that may arise, the returns on the e SBI Flexi Deposit Account is very low.
Of course, SBI staff and senior citizens are entitled to an extra interest rate of 1 per cent.
Should you open an e SBI Flexi Deposit Account
Interest rates on deposits, fixed, recurring or otherwise are the lowest at the State Bank of India. Just imagine you are getting a term deposit interest rate of just 7 per cent for tenures ranging from 3 to 10 years.
There are many other options where you can get higher interest rates. For example, you can deploy money in banks or company fixed deposits. Bajaj Finance is currently offering an interest rate of 8.85 per cent on its deposits. However, the only problem is that you have to apply for larger sums.
We would prefer that you look at flexi deposits that are available at other banks, where you would get much higher interest rates than what e SBI Flexi Deposit Account is offering.
Having said that we feel that investors are now living in a low interest rate regime. It is going to be exceedingly difficult to make money from fixed interest bearing instruments. Investors would have to look at other avenues.
In fact, if interest rates remain low, investors will continue to look at gold, real estate and equities as an ideal investment destination.Just hope that the RBI does not cut interset rates anymore.