The rates of interest on financial institution mounted deposits (FDs) are at historic lows. To draw extra depositors, banks are providing FDs with further advantages reminiscent of an insurance coverage cowl. DCB Financial institution launched an FD with medical health insurance advantages in November 2020. ICICI Financial institution additionally provides a financial institution FD which offers advantages, together with well being and life insurance coverage covers below completely different variants.
Banks typically tie up with well being insurers and supply advantages below group insurance policies. The advantages differ from financial institution to financial institution. For instance, DCB Financial institution has tied up with ICICI Lombard Normal Insurance coverage Co. and provides advantages like OPD (out-patient) consultations and pharmacy bills to a sure restrict, amongst different advantages, below its Well being Plus FD. ICICI Financial institution is providing a important sickness plan below its FD Additional possibility.
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So does it is sensible to go for such FDs?
Charges and tenure: These FDs typically supply customary charges. So, you’ll get the identical deposit fee as provided on a traditional deposit with no further profit. Nevertheless, the tenure is mostly mounted. For instance, DCB Financial institution’s FD is offered just for a tenure of 700 days. ICICI Financial institution’s FD has a minimal time period of two years.
Funding restrict: There may be typically a ceiling on the minimal and most funding quantity. For instance, DCB Financial institution’s FD has a minimal funding quantity of ₹10,000, whereas ICICI Financial institution’s FD has a minimal and most funding restrict of ₹2 lakh and ₹3 lakh, respectively.
Restricted cowl: The protection supplied below these insurance policies are restricted. For instance, in case of ICICI Financial institution’s FD, the important sickness cowl is just for ₹1 lakh. Additionally, there are age limits. For instance, the depositor shouldn’t exceed 50 years of age to put money into ICICI Financial institution’s FD; the restrict is 70 years for the DCB Financial institution FD.
Do you have to make investments?
These FDs present the identical charges with further advantages. So, if you’re investing for a similar tenure and meet all of the situations, chances are you’ll think about them, however watch out.
“Learn the phrases and situations rigorously earlier than investing. As an example, one of many FD variants has a tenor of two years however offers well being cowl just for one yr. One other FD variant has a spread of advantages that change relying on the quantity invested. The minimal and most age standards additionally differ throughout merchandise,” mentioned Adhil Shetty, CEO, Bankbazaar.com.
Additionally, don’t rely on it on your medical health insurance cowl. “The duvet could lengthen solely to the primary depositor typically, and the protection will not be enough. Additionally, if you could break the FD, you’ll lose the well being cowl. Most significantly, if the financial institution’s tie-up with the insurer ends, then you definately would not have the ability to avail the quilt in your subsequent renewal,” mentioned Shetty.
Assess all elements earlier than investing in these FDs.