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StanChart’s new deposit scheme

StanChart’s new deposit scheme
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First Published: Mon, Oct 01 2007. 12 08 AM IST
Updated: Mon, Oct 01 2007. 12 08 AM IST
Standard Chartered Bank has introduced a two-in-one term deposit scheme where investors can open a term deposit account for 400 days and use the deposit account for making systematic investments in any equity mutual fund.
The term deposit will earn an interest of 8.80% per year. The regular withdrawals from the term deposit will not attract any penalty. So instead of putting money in a systematic investment plan (SIP) from a bank savings account, which earns very low interest rates, a term deposit account will not only earn a higher interest rate but also give an investor the flexibility to invest in stock markets on a regular basis through the SIP in equity mutual funds. However, investors need to keep in mind that every month, interest will be paid only on the balance amount left after the withdrawal towards SIP instalment. Investors can choose any equity mutual fund scheme for linking the term deposit to an SIP account.
Many other banks also offer dual options, aimed at bringing in a more disciplined approach to investing in stock markets. Investors also need to be aware of the tax implications of such options because interest from bank deposits is taxable.
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First Published: Mon, Oct 01 2007. 12 08 AM IST