Private sector lender, Kotak Mahindra Bank has launched a savings account for children up to 18 years of age. It has also rolled out a 10-year recurring deposit (RD) for long term financial planning.
The interest rates on savings accounts for children and on the RD would be same as being currently offered on general savings bank accounts and fixed deposits, respectively.
Currently, the Kotak Bank offers 5.5 per cent interest on savings account balances of up to Rs 1 lakh and 6 per cent on balances above Rs 1 lakh.
FD rates of the bank are 8.50 per cent for three years and less than four years, 8.25 per cent for 4-7 years and 8 per cent for above seven years and up to 10 years.
"We had a gap in our overall offering which kept us away from the RD product. Also, RD holders do not benefit when interest rates are low," said Mr. K. V. S. Manian, President - Consumer Banking, Kotak Mahindra Bank.
It is also beneficial to lock in one's money under high interest rates. At present, the interest rate regime is attractive enough to open an RD account, he added.
The ‘Kotak Junior' account can be linked to the RD as well as a Systematic Investment Plan with a minimum investment of Rs 5,000 into mutual funds. The account will provide a membership-cum-debit card.