If you are among those who stay away from the volatility of even debt mutual funds, there are several banking products that you can look at for short-term goals. There are special Recurring Deposits (RD) for customers to save based on their goals, by top private banks.
These recurring deposits are different from other deposit-based products. For instance, these are flexible, and through an online user interface, individuals can also monitor the progress.
An investor, after opening a flexible RD account, can put in any amount he wants every month, unlike regular RDs, as there's no commitment for a fixed amount that needs to be deposited.
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ICICI Bank’s ‘iWish account’ and HDFC Bank’s ‘Dream Deposit’ are flexible RDs, both of which are available on internet banking. Axis Bank’s flexible RD, known as Axis ASAP, is available for its customers only on through the mobile app. With ICICI Bank’s ‘iWish Chhota Savings’, customers can also round off their everyday transactions such as fund transfer or bill payments, and invest the amount in the iWish account.
Each bank has its own restrictions on the maximum and the minimum amount that can be deposited by an individual. Generally, there are three round-off options available- Rs 50, Rs 100 and Rs 500. There are also limits on the goal amount and the tenure of the RD. Hence, before opening an account, do check these limits. For instance, ICICI Bank comes with a minimum goal amount of Rs 5,000, which can go up to a maximum of Rs 10 lakh. On the other hand, HDFC Bank allows a minimum top-up of Rs 1,000 monthly, with a minimum tenure of 6 months and a maximum tenure of 10 years. Axis Bank has a goal tenure that ranges between 3 months and 3 years.
Customers need to place an online request to close the account once they reach their goal. Normally banks don't allow partial withdrawal, and the interest paid depends on the amount deposited and tenure of the goal.
These flexible RDs are targeted especially towards technology-savvy customers and are offered either through mobile phone apps or on internet banking. When opting to open such an account, you have to specify the targeted amount and tenure by which you have to reach it. After which, you can easily monitor your total money savings, and how far you are from the goal.
According to banking experts, the top goals of existing customers include down payment for home loans, vacation, buying a vehicle, children’s education, wedding, and home furnishing or renovation.