The iWish Account offered by ICICI Bank is a recurring deposit account. Recurring deposit means that you deposit the same amount every week, month or every quarter to build up your corpus. For example, you put Rs 10,000 into the recurring deposit every month. You can make this deposit from time periods ranging from six months to 10 years. The bank’s calculator will tell you the deposit you need to make according to the time-frame and amount of goal you select.
The interest rate offered by the bank on these accounts ranges from 6-6.5% over various time periods. For senior citizens, the rate goes from 6.5% to 7%.
Refer to the table below:
|Period||General Public||Senior Citizens|
|12 months only||6.60%||7.10%|
|13 – 24 months||6.75%||7.25%|
|25 months to 3 years||6.50%||7.00%|
|37 months to 5 years||6.50%||7.00%|
|5 years 1 day to 10 years||6.50%||7.00%|
What if you miss a deposit instalment? This will attract a stiff penalty from the bank – at about 15.3% annualized interest on the delayed amount. If you really can’t keep up with your instalments, you would be much better off simply closing the iWish deposit.
Premature termination will get you the interest rate for the period over which you have maintained the deposit minus the termination penalty. This penalty is 0.5% for deposits below one year and 1% for deposits above one year.
So how much will a recurring deposit give you, once you’ve selected a rate and term? Use our recurring deposit calculator to find out. Note that fixed deposits are taxed as per your slab rate and TDS (Tax Deducted at Source) of about 10% is deducted from them by the bank.
You can do an SIP (Systematic Investment Plan) in a liquid fund. On average these funds have given 6.62% over the past year and 7.27% annualized over the past three years. The returns on these funds are not guaranteed but carry a relatively low level of risk. They are also more tax efficient because TDS is not deducted from them. If held for more than three years, the growth in these funds will be taxed at 20% and given the benefit of indexation.