State Bank of India, India’s largest bank, on Thursday launched a recurring deposit product for holiday savings, in partnership with travel company Thomas Cook India. The offering is available to SBI’s 2.2 crore online banking customers who can pre-select a holiday package from Thomas Cook and save for it through a recurring deposit with the package cost divided into 12 instalments. The offer includes a free top up 13th instalment by Thomas Cook at the end of the 12 instalment cycle.
“Customers will be offered an inflation-proof holiday as they pay for a future holiday at today’s prices while earning interest on linked e-recurring deposit,” said SBI . At present, SBI’s recurring deposit interest rate stands at 7.25%.
“Our intent is to get more customers (on the savings account)...We find that people don’t plan their holidays in advance and end up taking last minute loans to finance the same. Also, they could’ve saved on the cost of the holiday had they booked early,” said Rajnish Kumar, managing director, SBI.
The ‘holiday savings account offer includes return airfare, transfers, accommodation on twin share basis, all meals, sightseeing and taxes. Thomas Cook offers this for 14 holiday destinations, seven each for domestic and international.
“It’s a volume driven exercise and so far we have seen 13,000 passengers travel using this product since the launch in December 2014. The average ticket size per customer is about Rs 56,000-57,000. We have got economies of scale and based on security of the customer’s money,” said Madhavan Menon, Chairman and MD, Thomas Cook India.
Thomas Cook also has such tie-ups with three other banks -- IndusInd, ICICI and Kotak Mahindra Bank.