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SBI news updates: The country’s largest bank has tied up with two companies to offer this benefit
SBI has partnered with Thomas Cook and Cox and Kings for this scheme
With the second wave of Covid gradually receding, more and more countries are opening their door for foreign tourists. Almost all the countries have started Covid vaccination status linked with passport as a safety measure. If months of staying indoors is prompting you to plan a trip with your family then State Bank of India (SBI) is offering you attractive and innovative holiday savings account for its customers. The objective of these accounts is to enable customers to plan a vacation. SBI has partnered with Thomas Cook and Cox and Kings for this scheme.
How does it work?
To open a holiday savings account you need not to visit any SBI branch. On the contrary one has to visit the offices or websites of Tomas Cook or Cox and Kings.
You have to select a plan which is linked with SBI holiday savings account and select it online.
Once you select the plan, you would be directed to SBI website and have to fill the form.
This account is more like a recurring deposit. When you choose a vacation plan for your family, it gets divided into 13 instalments. Customers can set up an e-recurring deposit (e-RD) account for a period of 12 months.
At the end of the 12-month period, the maturity proceeds will be transferred to Thomas Cook or Cox and Kings to pay for customer’s pre-selected holiday package. The concerned travel company would fund the 13th instalment or the balance amount once it factors in the accrued e-RD interest.
Interest rates
On the recurring deposit of more than one year but less than two years, SBI pays an interest rate up to 5% per annum and a top up from the selected travel company Thomas Cook which is equal to the 13th instalment.
According to SBI, the e-RD account with an additional rate of interest for senior citizens would be issued if the option for ‘Senior Citizen’ is selected by the customer and age of the customer is 60 years or above. Senior citizen generally gets 5.5% interest on 1 year-2-year RD.
In this case, too, a senior citizen is eligible to get 5.5% after 12 months, and the 13th instalment would be paid by the travel company.
Important points
These holiday savings accounts have a fixed tenure of 12 months, account turn into inactive beyond 12 months of time period.
TDS is applicable to the accrued interest. Premature closure of this account is allowed and the applicable premature withdrawal penalty of the bank will be applied.
If this account is closed prematurely, then the proceeds will be credited to the account from which the e-RD account was initially funded.