SBI Holiday Saving Account: Know how it works, penalty in case of delay in payment, other details

New Delhi: If you are looking for a travel loan, State Bank of India (SBI), the country’s largest lender, in association with Thomas Cook India provides the facility of a holiday savings account. In this account, an individual can invest a fixed amount of money in SBI recurring deposits in order to build a sizeable corpus for a holiday package.

According to the SBI’s official website, “Under this scheme, you can save monthly amounts in the form of a recurring deposit with the Bank in order to avail a vacation package listed under Holiday Savings Account packages on Thomas Cook website.”

Know how it works-

1. Visit the Thomas Cook website and choose a package of your choice.
2. The cost of the package you choose will be divided by 13. You will be redirected to the Online SBI portal where you can set up an e-Recurring Deposit (e-RD) account for 12 monthly instalments
3. Your e-RD will earn interest as per the prevailing interest rates for the 12 month period.
4. At the end of 12 months, the maturity proceeds will be transferred to Thomas Cook to pay for your pre-selected holiday package
5. Thomas Cook will fund the balance amount i.e. the 13th instalment to purchase your package after factoring in the accrued e-RD interest.

If this e -RD account is closed prematurely, the proceeds will be credited to the account from which the e-RD account was initially funded. It may be noted that premature closure of this e-RD account is allowed and the SBI’s applicable premature withdrawal penalty will be levied. There will be a penalty in case of delay in payment of instalment of RD will be Rs 1.50 for every Rs 100 per month.

The proceeds of the e-RD account will be subjected to the TDS, therefore, the customer will be solely responsible for adjusting any shortfall in the funds at the maturity due to TDS.

Worth mentioning that while planning to take the loan, keep the loan amount in mind. Make sure that you do not overspend. While deciding the loan amount, evaluate your financial needs. Do not indulge in unnecessary luxury expenditure during your trip otherwise you will increase the chances of default on repayments.