If you are a young professional who feels the need to have an insurance cover in place while also having a bank account that provides incentives for lifestyle spending, then the Axis Liberty Savings Account might be right for you.
Axis Bank has launched a new savings account called the Axis Liberty Savings Account, aimed at millennial customers. It offers customers the option of maintaining a minimum balance of ₹25,000 per month or spending the same amount every month using the bank's debit card. It also provides a complimentary insurance cover of ₹20,000, which includes expenses incurred for covid-19-related hospitalization. But is this bundled offering right for you?
According to Praveen Bhatt, executive vice-president, retail liabilities and direct banking products, Axis Bank, the product is aimed at salaried professionals aged under 35. “They are digitally savvy, well-informed and are on the look-out for offers and deals which they compare before choosing. The product design addresses these very characteristics by offering choice and flexibility of ‘balance vs spends’, cashback for weekend spends on most used categories like food, entertainment, shopping and travel, as well as and quarterly gift voucher on spends," he said.
Raj Khosla, founder and managing director, MyMoneyMantra, said that the product is indeed tailor-made for millennials.
“It is directed towards those who are in the first two to five years of their career. It is a smart move from the bank’s perspective because they are trying to establish a relationship while the customer is young. Over the life cycle, they can get them on board for a home loan, or perhaps a personal loan, cards, and multiple other products," he said.
Liberty Saving Account customers can expect to earn similar interest rates as regular Axis Bank saving bank accounts offer.
“They want you to spend on their card. So if you spend the amount, the bank benefits, but if you leave the minimum balance in your account, the bank still benefits. While spending might be incentivized through cash backs and offers, there’s no compulsion to do so.
The prospective cardholders are all adults and can make their own decisions. They can benefit from the offers if they planned to make the spend to begin with," Khosla added.
Bhatt said that the customer segment in question is inherently inclined to spend. “They do so after intelligently evaluating the best ways to. The product proposition aims at extending benefits to customers on this very behaviour for spends through the debit card and account," he said.
Another perk that the account offers is insurance. A daily hospital cash cover of ₹20,000 for a year is available for hospitalization. It’s complimentary and will be issued to the customer when they open a Liberty Savings Account. “The idea is to provide that additional cover to customers in the current environment where there is heightened concern around health," said Bhatt.
But according to Adhil Shetty, CEO, BankBazaar, additional features are only useful if you need them. “In many cases, the savings account is usually a long-standing one, and has a long history of payments and receipts. It is the basis of your relationship with the bank and could even have an impact on your credit history. Keeping this in mind, it is essential that you select a savings bank account that has features that complement your income flow. Some may provide you with additional insurance or come with a complimentary locker service, but these would be useful only if you need these additional services and not otherwise. So look at all the features the account provides and only then take a decision," he said.
If you are a young professional who feels the need to have an insurance cover in place while also having a bank account that provides incentives for lifestyle spending, then the Axis Liberty Savings account might be right for you.
But keep in mind that you will have to maintain a rather high minimum balance of ₹25,000 or spend the equivalent amount each month.
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