Peruse the terms prior to putting resources into FD’s with protection benefits.

The rate of interest has been decreasing in the bank’s fixed deposits. For attracting more and more people towards these FD’s the banks are keeping additional features like an insurance cover. On November 20, an FD with health insurance was introduced by the DNB bank. Also, ICICI bank is providing FD’s with such benefits of health insurance and life insurance.

The banks provide these advantages by binding up with the health insurers. Also, there are different advantages provided by different banks.

Why should one go for such FD’s? The features are explained below-

  • The interest rate and time – There are standard rates provided by the bank. The time is also usually fixed. For example – DCB bank’s tenure can be 700 days while for some other bank it can be 2 years.
  • Limit of Investment – There is a limit on the maximum and minimum investment amount. For example, DCB bank has a minimum investment of about 10,000 but some other banks like ICICI may have a minimum and maximum of 2lakhs and 3lakhs respectively.
  • Cover Limit – There are limited policies under this coverage. For instance, insurance can cover only 1 lakh of illness in ICICI Bank with the age limits. Like, the investor cannot exceed 50 years of age for the investment in ICICI Bank FD. The age limit for the DCB bank is 70 years.

The question now arises as to whether one should invest or not?

The rate of interest provided by all the banks is similar with or without these additional benefits. But it’s always better to go through all the terms and conditions before making any decision. One of the bank’s FD may have a tenure of 2 years with a one-year health benefits insurance. The minimum and maximum age criteria can also vary in different insurances provided. You may take insurance and if you break the FD in between that health insurance goes into waste. There are several norms behind these insurances provided. One should read all the norms, conditions and then go for it.

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