HDFC Bank launches minor savings 'Arumbu'

HDFC Bank has introduced a minor savings plan branded as 'Arumbu' to meet the growing demand among the parents to provide a sound financial support for their children when they reach adulthood.

This product also has a contribution to the society where HDFC Bank allocates certain percentage of the funds collected to set up a fund to provide computer education to deserving children who have no access to this type of education.

This product is a brainchild of the chairman of the HDFC Bank S.M.M. Yaseen who identified the vacuum in the market to satisfy the needs of Tamil speaking community in our country. The meaning of 'Arumbu' is a flower bud and depicts the children of our country.

The objective of this product is to provide a suitable financial plan for parents/guardians to plan for their children to ensure financial support for their education, marriage, building a house or starting a business and make their lives secure when they reach adulthood and at the same time contribute to the development of the country.

Arumbu is for children below 12 years where the account could be opened by a parent or a guardian of the child with a minimum monthly deposit of Rs. 100 and a maximum of Rs. 5,000.

The parent or the guardian also should agree to provide this deposit continuously for a period between 24 months and 60 months.

After the expiry of agreed period, the bank will provide a certificate guaranteeing specified amount that they can claim after reaching 18 years.

Eg. If the parent deposits Rs. 100 for 24 months the child will receive Rs. 12,207 which is five times return on the initial deposit. If they select to deposit Rs. 5,000 for sixty months the beneficiary will receive Rs. 1.3 million which is a return of more than four times of the initial deposit.

In an unforeseen event if the parent or guardian is not in a position to continue their deposit the Bank will pay the child the assured amount when the child reaches 18 years. In the above example Rs. 12,207 or Rs. 1.3 million will be paid even if the parent has deposited only one instalment and unable to pay any more due to an unforeseen event.

HDFC has 26 branches and convenient centers in all districts other than the northern district to facilitate any parent or guardian to open this minor savings account.

This product also will be available at our Vavuniya Branch which will be opened in January 2010.