Banks have been introducing various innovative deposit schemes to provide value added services to the customers with an objective to retain existing clientele and to expand the base further. Besides extending existing generic deposit products such as Current, Savings, Recurring, Fixed and Kalpataruvu deposits, Bank introduced many new deposit schemes in the recent past and the brief details of the schemes are furnished here under:
AB-Freedom (Flexi) Deposits: The scheme provides features of both Savings and Term Deposits to the customers. When SB account is opened, Fixed and Reinvestment deposit accounts also will get opened for the customer with the same account number but without any balance. All individuals (single/joint), Clubs, Associations, Trusts, Hospitals, Schools and colleges are eligible to open Flexi accounts. However, special minors are not allowed to open accounts under this scheme. Minimum balance prescribed for AB Freedom SB account is Rs.5,000/- and the minimum period of deposit is 15 days and maximum period is 12 months for FDs/RIP Deposits. The customer is required to specify tenor option while opening the account. In case where the customer does not exercise option, system takes 15 days for FD and 6 months for RI as default tenor. The rate of interest is as applicable to domestic term deposits. The depositor can choose either FDR or Reinvestment deposits. The depositor can change his choice from FDR to Reinvestment Deposit or vice versa for the future bunches of units to be opened. Whenever, the balance in the SB account exceeds Rs.5000/-, system transfers the balance in to Fixed or Re-investment Deposit with a minimum deposit of Rs.5000/- or multiples thereof. Similarly, whenever the customer presents a cheque in excess of SB balance, system cancels the term deposits (Rs.1000/- or multiples thereof) to meet the requirement. No penalty for premature withdrawal of deposit units under this scheme. After cancellation of units in a bunch of units, the remaining units will continue to earn interest at the contracted rate. No deposit loan is allowed against Flexi Deposits. Deposit Receipts will not be issued for the units opened under the scheme. Statements will be issued for SB as well as Fixed Deposit/ Reinvestment Deposit transactions. (Circular no. 159 Ref 44/20 dated 27.08.08 & Cir.no.381 Ref 27/55 dated 07.02.11)
AB Premium Current Account: In order to provide value added services to the Business community, Bank introduced special deposit scheme in the month of October 2008. It is meant for Current Deposit Accounts and the minimum balance required is Rs.100000/-. They are entitled to avail Free Cheque Book Facility (including Multi City Cheques), No Folio and Transaction Charges, Any Branch Banking and Instant Funds Transfer, 50% concession in Service Charges for Funds Remittance. Balance in excess of Rs.200000/- can be converted as Term Deposits (in units multiple of Rs.10000/-) subject to the guidelines as applicable to AB Freedom (Flexi) Deposit Scheme. It helps the branches to improve the CASA Deposits. (Circular no.238 Ref 44/30 dated 16.10.2008)
“AB Super Salary SB Account” – The existing scheme of “AB Privilege Corporate Salary SB Account” is re-launched with the following features:
- Salaried staff of any company/organization drawing salaries through our Bank.
- The Average Minimum Balance of Rs.5000/- should be maintained except when the account is in debit balance.
- No Ledger Folio / Transaction charges.
- Free ATM/Debit Card (for first year).
- Free Credit Card / Demat Account / Internet Banking / Online Trading(conditions apply).
- Free Remittance up to Rs.25000/- per month.
- Free Statement of Account – Once in a month.
- Free issue of Cheque Books (50 leaves in a year).
- Scheme provides for conversion of balance in excess of Rs.10000/- as Term Deposits (units multiples of Rs.5000/-) with Sweep and Reverse Sweep facility as in the case of AB Freedom (Flexi) Deposit Scheme.
- Similarly, the scheme also provides for Temporary Overdraft facility equivalent to the latest Net salary drawn by the account holder at Base Rate + 7.50%. These two options are mutually exclusive. In other words, where the account holder opts for Overdraft facility, he/she cannot avail the flexi deposit option facility. (Cir. No.351 Ref 27/21 dated 01.02.10)
AB Recurring Deposit Plus Scheme: This scheme is meant to built-up corpus fund for individuals / firms / institutions / companies through regular monthly deposits over a period of time to meet their future financial requirements. The salient features of the scheme are as under:
- Depositor has an option to choose a core installment between Rs.100/- to Rs.100000/- and further he has option to deposit any amount not exceeding 10 times of core installment.
- Minimum period of deposit is 6 months and maximum period is 60 months.
- No penalty for late payment of installments.
- Interest is calculated on daily products i.e. minimum balance available between 10th and last day of the month.
- No penalty for premature withdrawal. However, in case of RD account closed within 6 months, penalty @ 0.50% on the balance outstanding subject to a minimum of Rs.50/- and maximum of Rs.500/-.
- Depositor can remit monthly installment at any branch of Andhra bank without any charges.
- Interest accrued is exempted from Tax Deduction at Source (TDS).
- Transfer of accounts between the branches is not allowed.
The other guidelines (Nomination, Payment of maturity amount, Claims etc.,) that are applicable to existing RD Scheme holds good to AB RD Plus scheme also. (Circular no.081 Ref 44/09 dated 20.06.2009)
All staff deposit accounts earns 1% extra interest while they are in service as well as on retirement/resignation. Further, in case of senior citizens (staff) they continue to earn applicable senior citizen deposit rate plus 1% extra. (Cir.no.4 Ref 3/1 dated 05.04.2011)
AB Grama Kranthi Savings Account: It is a new scheme with a built-in overdraft facility aimed at to offer basic banking services to the financially excluded sections of the society using Smart Card and Biometric authentication technologies through Business Correspondents. No minimum balance and no service charges are applicable. Simplified KYC norms are applicable. No cheque book and ATM/Debit cards will be issued. It is an Entrepreneurial credit scheme for covering the general credit needs of the Bank’s customers in FI villages with a maximum credit limit of Rs.25000/- per household at Base Rate+3.5% without any collateral security. The limit is valid for a period of 3 years and should be reviewed every year. (Cir.no.514 Ref 19/48 dated 22.03.13).
AB Basic Savings Bank Deposit Account (ABBAS): As per RBI directions, Banks are required to adopt simplified procedure to open SB accounts without any stipulation on minimum balance. All individuals who are eligible to open normal SB accounts can open No frills accounts subject to introduction from another account holder who complied KYC norms. The introducer’s account with the bank should be at least six month old and should show satisfactory transactions. Photograph of the customer who proposes to open the account and also his/her address needs to be certified by the introducer OR any other evidence as to the identity and address of the customer to the satisfaction of the bank. These accounts do not attract service charges / penal charges. No cheque book shall be issued. Drawals from account shall be permitted only through numbered withdrawal forms accompanied by passbook. Once the balance in the account exceeds Rs.50000/- or total credits in the account exceeds Rs.100000/- in a year, no further transactions will be permitted in the account. The customer has to close the account and open normal saving account fulfilling the complete KYC procedure. (Circular no.444 Ref 51/31 dated 26.03.2008)
AB Tax Saver: It is a term deposit (Fixed/Reinvestment) scheme earns interest as well as tax benefits under Section 80 C. It is meant for individuals and HUF (only Income Tax Assesses with PAN). Deposit can be opened in single/joint accounts. In case of joint accounts, tax benefit is available only to the first holder of the deposit. Minimum deposit is Rs.100/- and Maximum amount allowed is Rs.100000/-. The minimum period of deposit is 5 Years. It earns interest as applicable to five year deposit. Declaration is to be obtained from the first depositor that the total deposits under this scheme at various bank branches do not exceed Rs.100000/- during the year. No nomination can be made in respect of a term deposit applied for and held by or on behalf of a minor. Deposit receipt shall bear the name, address, PAN and signature of the depositor. No deposit loan or no lien to any other loan. No premature cancellation. (Circular no.431 Ref 51/30 dated 13.03.08)
AB Smart Choice (Unfixed Deposit) Scheme: Bank has introduced a new Unfixed Deposit with an objective to extend better interest rate to the coporates, institutions and high networth individuals with a name titled “AB Smart Choice” with effective from 1st January 2014. It is a term deposit account and the minimum period of deposit should be minimum 7 days and maximum 179 days. The minimum amount of deposit should be Rs.1.00 crore and above and no premature cancellation charges if the deposit cancelled after 7 days. No additional interest for staff/retired staff and Senior Citizens under this Scheme. At present the interest rate is 8.25% p.a. (Cir no.390 Ref.No.27/40 dated 31.12.2013 & Cir no. 476 Ref 27/53 dated 28.02.2014)
Capital Gains Scheme: The scheme is aimed at Income Tax Assesses to extend relief of tax on long-term capital gains for different assets provided the assesses purchase another specified assets within a certain time frame. The assesses are eligible for exemption under section 54, 54B, 54D, 54F or 54G of the IT Act 1961. All branches except Rural Branches can open SB and Term Deposit (FD/KTD) accounts of the said category depositors. Accounts should be opened in individual names only and no joint accounts are allowed. No cheque book is issued to SB accounts. Depositors are required to submit withdrawal form along with form “C” to withdraw amount from the account. Similarly, Term Deposit funds cannot be directly paid to depositor and they should route through respective SB account only. To close account, depositor has to submit application in form “G” along with written approval from the assessing officer having jurisdiction of the depositor. Deposit loans are not allowed and no lien should be allowed on the said accounts. (Circular no.453 Ref 44/25 dated 16.01.2006)
Deposit Schemes Discontinued – Branches are not permitted to accept fresh deposits under AB Excel, AB Super, AB Supreme, AB Jeevan Prakash, AB Jeevan Prakash Plus, Sulabh, Stock Invest, Samkshema, Home Loan, Mediclaim, AB Pattabhi, AB 400, AB Pattabhi Plus, AB Power as the schemes were discontinued. However, the existing deposit accounts under the above schemes will continue till maturity.
|Public Provident Fund Scheme (PPF)-1968|
|Limit of Subscription||Amount not less than Rs.500/- and not more than Rs.100000/- in a year in one lump sum or in installments not exceeding twelve in a year.|
|Rate of interest||8.70% p.a. Compounded annually or as prescribed in the Official Gazette published by the GOI from time to time. Interest is paid on funds deposited before 5th of every month.|
|Mode of holding||Any individual on his behalf or on behalf of a minor of whom he is Guardian or HUF or an association of persons or body of individuals. NRI’s cannot open accounts under this scheme.|
|Tax treatment||The entire amount deposited in to PPF during the financial year is treated as deductible Under Sec.80C of ITR Act.|
|Transferability||Yes. Can be transferred inter Bank and intra Bank.|
|Nomination||Nomination facility is available.|
|Withdrawal facility||Any time after the expiry of five years starting from the end of the year in which the initial subscription was made. Only one withdrawal is permitted in a year.|
|Loan facility &
Permitted with the following limits.
Repayable within 36 months from the first day of the month following the month in which the loan is sanctioned.
|Extension of a/c||5 years at the option of the subscriber.|
|Closure of account||After the expiry of 15 years from the end of the year in which the initial subscription was made.|
|Senior Citizen Savings Scheme (SCSS)-2004|
|Tenure of the scheme||5 years which can be extended by 3 more years|
|Rate of interest||9.20% per annum|
|Frequency of computing interest||Quarterly|
|Taxability||Interest is fully taxable|
|Whether TDS is applicable||Yes, Tax will be deducted at source|
|Investment to be in multiples of||Rs.1000/- Maximum investment limit Rs. 15 lakh|
|Minimum eligible age for
|60 years (55 years for VRS optees). However, age limit is not applicable to Defence Service personnel.|
|Premature withdrawal facility||Available after one year of holding but with penalty Transferability feature Not transferable to others|
|Modes of holding Accounts||Can be held both in single or joint holding modes. Joint holding is allowed but only with spouse|
|Applicability to NRI, PIO and HUFs||Non resident Indians, Persons of Indian Origin and Hindu Undivided Family are not eligible to open an account under the scheme.|
|Transfer of account||Transfer of account from one deposit office to another in case of change of residence is permitted|
|Bank earns a commission @ Rs.45/- per transaction on PPF and SCSS. (Cir.no.244 Ref 51/18 dated 20.10.2011)|