Earlier this month, ICICI Bank launched a unique range of term deposit plans called 'FD Xtra.' In a country like India, fixed deposits are a favourite amoung savers, and banks are looking for ways to attract customers with these products and services.
What is FD Xtra?
The 'FD Xtra' range of fixed and recurring deposits according to the bank will offer investors "a combination of attractive interest rates, liquidity, safety of capital and assured returns" as these deposits will be "aligned to various life-goals of a customer like protection through a term plan, option of investing in equity markets through mutual fund SIPs or planning for requirements like higher education, retirement corpus, travel among others."
The interest rates offered on these FD products are the same as a general FD provided by ICICI Bank. The only difference is that you can now modify the product to include additional features.
These come as a range of products that include:
1. FD Life
For customers between 18 to 50 years of age, this FD scheme provides a dual benefit of fixed deposit and a free term life insurance of one year for the holder. A complimentary insurance cover of Rs 3 lakh from ICICI Prudential Life Insurance Company will be provided on opening an FD of at least Rs 3 lakh for a tenure of minimum two years. The customer has the option to renew the cover on completion of a year's time.
Should you opt for it?
The insurance cover isn't exclusively enough if your family is dependent on your income. While the additionally complimentary term insurance is attractive, that should not be your sole reason to open an FD with ICICI Bank.
Instead, compare the interest rates offered elsewhere for the same tenure and make your decision.
As for term insurance, you can always opt for a single good plan with any insurer with the primary intention of providing enough for your family.
2. FD Invest
The customer will be able to invest the interest earned on the FD in monthly Systematic Investment Plans (SIPs) of a mutual fund of their choice offered by ICICI Prudential Asset Management Company. The scheme can be availed on an FD of at least Rs 2 lakh and for a period between 12 months and 10 years.
Should you invest?
While the option to automatically invest in a SIP is a good way to multiply your money, you will be restricted to investing only with mutual funds managed by ICICI Prudential Asset Management Company, thus limiting your options.
You can look at FD interest withdrawal plans with any bank and personally choose from a plethora of mutual fund options in the market as per your risk appetite.
3. FD Income
These are available as RD and FD, these come with the flexibility of how you want you to treat your proceeds on maturity. There are two options:
- You can receive the entire maturity amount as parts of monthly income for a tenure of your choice.
- Withdraw 30 percent of the maturity proceeds as a lump sum and the rest 70 percent as monthly income for a tenure you like.
The maximum tenure here would be 10 years. Deposit tenure is the combination of Investment phase and Payout phase where the Investment phase will be for a minimum period of 2 years and in multiples of 1 month thereafter, while the Payout (repayment) phase will be for a minimum period of 2 years and in multiples of 12 months thereafter.
The minimum deposit has to be Rs 1 lakh and in multiples of Rs 25,000 thereafter.
Should you invest?
This is like a pension payout plan offered by many players in the market, including LIC, that allow you to invest a lump sum that you can withdraw till there is no principal amount left.
4. FD Card
This FD scheme comes with an instant credit card that is offered without any joining or annual fees. The FD can be either traditional (interest payout option) or cumulative (reinvestment of interest). The credit limit will be up to 85 percent of your FD amount that has to be a minimum of Rs 10,000 and for a tenure not less than 6 months.
Should you opt for it?
If you are new to credit cards, this is a simple way to get one. As for those that have a specific use or need with a credit card, you can opt for ones that come with offers and bonus points so as to maximise their credit limit.
How to opt for ICICI Bank FD Xtra schemes?
One can visit the nearest ICICI Bank for these FD schemes, according to its website. As for the 'FD Income' plan, you can apply through internet banking if you already hold a ICICI Bank account.