On one hand banks are increasing their Interest rates on Saving Bank Deposit accounts on account of deregulation of SB interest rates by RBI. On the other hand State Bank of India has come out with an innovative idea of unfixed deposits whereby customer will not only get High Returns but will also get Full Liquidity on their deposits .
Under the Scheme the Bank is offering interest @ 8.5% p.a. on Bulk deposit of Rs. 1 crore and above for a period ranging 7 Days to 180 Days. There is a facility to withdraw the funds anytime after 7 days and interest is paid at contracted rate i.e 8.5% at present upto the date of withdrawal. It means no penalty is charged on premature withdrawal of funds. Though there is no lock in period in such deposit, no interest is paid if funds are withdrawn before 7 days. The product is ideally suited for short-term liquidity of individuals, Companies Firms, Institutions Trust, Societies, Associations etc.
The above product is also available for retail deposits of below Rs.1 crore for a period ranging 7 Days to 179 Days at 7.25% p.a. Rate of Interest.
A Saving Bank Deposit account allows you to keep your money safe and secure and earn a small interest over it as well. You have the option to withdraw the funds as per your requirement any time in case of need. SB deposit is Liquid in nature.
A fixed deposit account allows you to deposit your money for a fixed period of time on a fixed rate of interest thereby earning a higher rate of interest in return than a savings bank account. Funds placed in a Fixed Deposit usually cannot be withdrawn prior to maturity or they can be withdrawn before maturity by giving an advance notice (in practice it is not) and /or by paying a certain penalty thereby reducing the interest earnings. The main feature of Fixed Deposit is Higher Returns.
Unlike the conventional deposits viz. Saving Bank or Fixed Deposit, the Unfixed Deposit gives you the opportunity to withdraw your money any time without prior notice and without losing out on any interest. The Unfixed Deposit lets you enjoy higher returns and easy access to your money as well.
Then why to keep our hard earned money in savings account for unforeseen exigencies which earns only 4.00% interest (only a few banks offer 5.5% – 6% interest) and also why to keep the money in Fixed deposit where earning is reduced in case of premature withdrawal? Please think and act.