SBI Holiday Savings Account: How It Works, Interest Rates, Other Details

State Bank of India (SBI) in association with Thomas Cook offers the option of opening holidays savings account for holiday goers. Under this unique savings plan, investors can save monthly amounts in the form of a recurring deposit (RD) with the bank and avail a vacation package listed under 'Holiday Savings Account' packages on Thomas Cook website, noted country's largest lender on it's corporate website- sbi.co.in. SBI holiday savings account earns interest as per the prevailing interest rates for the 12 month period. On a recurring deposit of one year but less than two years, SBI currently pays an interest rate of 6.80 per cent.

How SBI holiday savings account works:

1. Visit the Thomas Cook HAS website and choose a package of choice

2. The cost of the package chosen will be divided by 13. You will be redirected to the online SBI portal where you can setup an e- Recurring Deposit (e-RD) account for 12 monthly installments

3. At the end of 12 months, the maturity proceeds will be transferred to Thomas Cook to pay for the pre-selected holiday package

4. Thomas Cook will fund the balance amount i.e. the thirteenth installment to purchase your package after factoring in the accrued e-RD interest.

Terms and conditions for SBI holiday savings account:

1. The e-recurring deposit account is opened for enrolling in Holiday Savings Account scheme of Thomas Cook and therefore information on this account is shared with Thomas Cook, noted SBI.

2. The tenor for this product is fixed at 12 months and the amount is decided by Thomas Cook based on the package chosen by the customer.

3. Premature closure of this e-RD account is allowed and the bank's applicable premature withdrawal penalty is applied. If this e -recurring deposit account is closed prematurely, the proceeds are credited to the account from which the e-RD account was initially funded. Penalty in case of delay in payment of instalment of RD is Rs 1.50 for every Rs 100, per month.

4.  e-RD account with additional rate of interest for senior citizens are issued if option for "Senior Citizen" is selected by the customer and age of customer is 60 years or above, on the date of creating the recurring deposit, as per date of birth recorded with the bank.

5. This e-RD account is subject to TDS (Tax Deducted at Source). The TDS is applicable on the Customer Information File (CIF) value and the amount of TDS applicable cannot be ascertained beforehand, mentioned SBI. The application of TDS may reduce the amount of funds transferred to Thomas Cook at the time of maturity.