ICICI iWish Flexible Recurring Deposit

Lot of people have various financial goals for which they save or wish to save regularly (monthly) over a period of time. Recurring deposits and Mutual Fund SIPs come in handy for such investors to save regularly (monthly) to accumulate funds to fulfil certain financial goals like buying a laptop, smartphone, any gadget, vehicle, consumer durable goods, jewellery, higher education, vacation, child education, child marriage or any other financial goal. In this article we will concentrate our attention on recurring deposits as a means for saving regularly to accomplish financial goal/s.

Most banks offer recurring deposits (RD) wherein an investor can contribute a fixed sum of money every month on a fixed date for a fixed period of time for which the bank offers a fixed rate of interest (which is specified at the time of opening the RD account).

In this article we explore ICICI Bank’s iWish Flexible Recurring Deposit. While this product offers the above mentioned features of a recurring deposit, it offers certain degree of additional flexibility to the advantage of an investor which is not offered by recurring deposit products of most banks.

iWish Flexible RD allows you to deposit any amount every month (as compared to a fixed amount in a traditional RD).

iWish Flexible RD allows you to deposit money on any date of the month (as compared to a fixed date every month in a traditional RD).

In iWish Flexible RD you can skip depositing money in a particular month without any penalty (as compared to penalty levied in traditional RDs for missed monthly deposits) in case you face some emergency in a particular month and are short of funds.

iWish Flexible RD allows you to deposit money multiple times a month (as compared to only once every month in a traditional RD).

These unique features of iWish Flexible RD make it standout as compared to traditional RD products offered by banks. Let us explore all the features of this product in detail.

What is ICICI Bank iWish RD?

iWish is a unique recurring deposit product which allows you to create a corpus for specific wishes (financial goals) that you may have in life. You can accomplish these goals through iWish RD with the added benefit of contributing any amount, any number of times, at any date. You earn better interest rates on your Recurring Deposit (as compared to savings account) just like a Fixed Deposit.

iWish is available only to existing Savings Account holders of ICICI Bank. So if you wish to avail iWish then you need to first open an ICICI Savings Account. In iWish since you decide how much you wish to invest every month and on what date of the month, you need to have internet banking activated and you need to know how to operate internet banking (if you don’t know how to operate internet banking, don’t worry. You can learn it very easily and quickly. It is not a big deal at all and anyone can learn it!). iWish in not available for NRIs.

The minimum tenure of an iWish RD is 6 months and maximum tenure is 10 years.

The minimum initial deposit amount (first investment at the time of opening the RD) is ₹ 500 and the maximum deposit amount is ₹ 49,999. After the initial deposit, the investor can decide how much amount he / she would like to deposit, on what date and any number of times on an ongoing basis.

The interest rate payable is similar to that of Fixed Deposits of same tenure. For the latest interest rate payable contact ICICI Bank. The interest amount on iWish RD account/s is credited / deposited in the iWish RD account/s at the end of each calendar quarter (31^st March, 30^th June, 30^th October and 31^st December).

You can manually decide how much money to put towards a goal on an ongoing basis or you can set up an online standing instruction in the iWish page. The standing instruction (automatic debit) can be set-up for depositing a certain amount in your RD every month. You can always modify existing standing instructions, cancel existing standing instructions, create new standing instructions etc.

Let us summarise the difference between a traditional RD and iWish RD through this table

Now that you understand the basics of the product, let us now understand how the product works in terms of goals. Let us assume an individual is saving for two goals:

Buying a bike (Rs. 50,000) after 10 months

A vacation abroad with family (Rs. 1,00,000) after 1 year

Creating goals: In iWish you can create two goals (two independent RDs or two individual RDs) separately for accomplishing each of these goals. In iWish each RD is termed as a goal. So you can set-up the bike goal (RD) separately wherein you can specify you wish to accumulate Rs. 50,000 in 10 months. So the goal amount will be set as Rs. 50,000 and the RD tenure will be fixed at 10 months. Once the goal is set, you can then start depositing money towards the goal on a regular basis to achieve the goal in the set time duration of 10 months.

Let us assume you decide to invest Rs. 5,000 every month towards the bike goal for the next 10 months. At the end of 10 months you will have the principal (Rs. 50,000) and the interest earned. The interest payable is fixed at the time of creating the goal. The interest is credited towards the goal at the end of every calendar quarter. You have the flexibility to deposit Rs. 5,000 every month for 10 months or higher amount in some months and lower amount (or nil amounts) in some months. You have the flexibility to make multiple deposits in particular months. You have the flexibility to make deposits on any date of the month.

The system will track the progress and keep updating you on the performance in terms of how are you proceeding with achieving your goal. You can also choose to set-up a standing instruction (auto-debit) for Rs. 5,000 per month for the next 10 months. In future you can always modify or delete this standing instruction or even define a new standing instruction.

Similarly you can set-up the family vacation goal (RD) separately wherein you can specify the goal amount as Rs. 1,00,000 and the tenure as 1 year. Once the goal is created, you can start setting aside money towards the goal on a regular basis.

Once you set the goal the system will track the progress and keep updating you and accordingly you can make adjustments so that you achieve the goal on time.

Minimum and maximum goal amount: The minimum amount that can be set for a goal is ₹ 5,000 and the maximum amount that can be set for a goal is ₹ 10,00,000.

You can create 10 different active goals at a time. You can share your goals on Facebook. Sharing of goals on Facebook is optional and not compulsory.

Achieving the goal before original tenure: If you achieve a particular goal before the original tenure, you will still have to keep the money in the RD till the maturity date. For example if the above bike goal (original tenure 10 months) is achieve in 8 months, you will still have to keep the money in the RD account for another 2 months. You will earn the RD interest rate for those 2 months.

Not achieving the goal within the given tenure: If you are not able to achieve the goal within the given tenure, then you can withdraw the amount accumulated till maturity date (with interest) without any penalty. For example if in the above bike goal (Rs. 50,000 in 10 months), the individual was able to accumulate only Rs. 48,000 (instead of Rs. 50,000) in 10 months (due to lower amounts deposited in some months), the individual can withdraw Rs. 48,000 without any penalty and close that particular RD or that particular goal.

You will also get SMS alerts when various milestones relating to a goal are achieved such as goal creation, funding of goal, goal closure and goal target progress.

Once you make a goal you cannot change the goal amount and tenure. So in the above bike example the goal amount of Rs. 50,000 and tenure of 10 months cannot be changed once it has been set-up.

Request for closure of goals: Once a goal is accomplished, you have to place a request for closure of your goal account online from ICICI Bank iWish page. For example in the above bike goal, once the ten months are over, you have to a request to close the goal. The goal will not be auto-closed and will go into overdue status once the original tenure is over.

Partial withdrawals from a goal are not allowed. You will have to close the entire goal and then withdraw the entire amount. In this case premature closure charges will apply.

Goal Performance Tracking: At any time you can get a summary of all goals: open and closed. For each open goal you can view the balance and percentage achievement.

Maturity Date: On the maturity date of a goal, the customer has to login into is account and request for closure of the goal to redeem the proceeds of the goal. If the customer does not make a request to close the goal, the funds will continue to lie with ICICI Bank in overdue state. For the overdue period, the funds will earn interest rate as applicable for savings bank accounts.

Premature closure: If the customer wishes to close the particular goal (particular RD account) before its tenure, then the bank will levy premature closure charges. For example if a 5 year RD (interest payable – 8.5%) is closed after 1 year (interest payable – 7.5%), then the bank will apply the interest rate applicable for a 1 year RD which is 7.5% (and not interest rate applicable for a 5 year RD which is 8.5%) for the amount that was there with the bank for 1 year and on this the premature closure charges (usually 1%) will be applied. Check with the bank for the exact premature closure charges as these are subject to change from time to time. The above given interest rates are just for example sake.

Nomination: The investor can nominate one nominee per RD (goal). Nomination can be made by visiting the ICICI Bank branch and filling the nomination form.

iWish online recurring deposit calculator helps you to know how much you need to save on a monthly basis for your goal. You just need to enter the amount you wish to accumulate and the tenure (months) in which you wish to accumulate the amount. The system takes the rate applicable currently for the tenure chosen and accordingly tells you the amount that you need to invest every month to accomplish your goal.

Let us summarise the differences between a traditional RD and iWish Flexible RD through the below table

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