A NEW BANK DEPOSIT SCHEME

A NEW BANK DEPOSIT SCHEME

 

 

 

NEW DEPOSIT SCHEME  ( REVERSE RECURRING DEPOSIT SCHEME )

At present Banks offer different types of Deposit Schemes. They are mainly of the following types:

Savings Bank

Current Account

Fixed Deposits

Cumulative Deposits

Recurring  Deposits

The Fixed deposit and other Term Term deposit Schemes  take lump sum amounts for a specified period and pay them back at maturity with the interest being paid in installments or at the time of maturity.

The Recurring deposit (RD) schemes involves payment of a fixed amount every month till the end of the period for which the deposit is contracted for ( eg. 12 months, 24 months etc). At the end of the period the total of the installments paid and the interest accrued thereon is repaid back to the Depositor.

This  type of deposit is useful to save small amounts regularly and get a lump sum at the end of the specified period to make payments like

Insurance

Premium, repayment of borrowings, make big fixed deposits, etc.

 

However Banks do not have any deposit scheme which is the opposite of the RD scheme.

 

Suggested Deposit scheme.

In this the depositor makes a lump sum deposit for a specified period.

The depositor would be paid back every month a fraction of the deposit till maturity of the deposit.

Interest will be calculated on the reducing balances at agreed rates of  interest and credited to the account at quarterly intervals and paid at the time of maturity.

Advantages of the scheme:

It is useful where a person has a lump sum amount to invest .

He has to make regular remittance

- say to his children for their maintenance

- to his parents to meet their monthly requirements

-  make payments towards house rent, etc.

 

 

The depositor can specify the account to which the monthly payments are to be credited.

 

Example of how the scheme will work.

Amount deposited       Rs.1,20,000/-

Period                             12 months

Rate of interest              8% p.a.

Monthly repayments     Rs.10,000/-

date

deposit

interest @8%p.a.

withdrawl

balance

 

01.01.2015

120000

 

0

120000

01.02.2015

   

10000

110000

01.03.2015

   

10000

100000

01.04.2015

 

2200

10000

92200

01.05.2015

   

10000

82200

01.06.2015

   

10000

72200

01.07.2015

 

1644

10000

63844

01.08.2015

   

10000

53844

01.09.2015

   

10000

43844

01.10.2015

 

1076

10000

34920

01.11.2015

   

10000

24920

01.12.2015

   

10000

14920

01.01.2016

 

647

10000

 
     

5567

0

         

 

 

 

 

Author

Kaushik Vichar

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