What exactly is ICICI Bank Money Multiplier FD ? | How to earn FD Interest on ICICI Bank Saving Account?

A wise man once said “It is more difficult to manage money than to earn money”, which is the truth. One of the most difficult task is to save money but there are ways like the Money Multiplier FD/Linked FD offered by the ICICI bank. If you are feeling a pinch on your wallet don’t worry you are not alone. In today’s world it has become super difficult for people to save money. There are many valid reason behind it and one of the biggest reason is ‘Inflation’. It is harder than ever for people to afford daily expenses and to save for financial goals at the same time. Life is unpredictable and therefore we need to have emergency fund in case of emergencies. We all went from saving a few rupees as kids to looking for the perfect savings account with higher rate of interest. There are also other options to save money. The best of the best option is to put your money on fixed deposit for a certain period of time. A FD that is fixed deposit is provided by banks or NBFC’s with a higher rate of interest than a regular savings account. But this is for a selected tenure that is for a certain period of time. This is called the maturity date. One of the biggest advantage of fixed deposits is that the returns are fixed. So you don’t have to worry about the returns.

In today’s time fixed deposits is considered as the best investment taking the economic conditions under consideration as you get high returns due to higher rates of interest. But there might be situations when you might end up needing a lump sum of money. In this case in spite of having money you can’t use it even at in case of emergency because it will be trapped for a selected time period. So the only problem with fixed deposits is liquidity. But what if I tell you there is one more option which can solve this problem and that is ‘Money Multiplier Fixed Deposit also known as Linked FD’.

What exactly is Money Multiplier FD ?

The linked fixed deposit gives you the benefit of a savings account and a fixed deposit as well. So it is definitely a win win situation. We can guess from the name what actually is Linked Fixed Deposit or Money Multiplier FD. If you were guessing that this linked fixed deposit is nothing but something that links your savings account to your fixed deposit then you are right. Now let me tell you how this works. A linked fixed deposit allows you to link your savings account to your fixed deposits. To explain it in simple words, you can save your money lying in your savings account as flexible fixed deposits. This way customers can gain a higher rate of interest without compromising on liquidity at all.

Now let us understand this with an example and assume that you have a sum of Rs. 2,00,000. Let us consider you have two options. If you put this money in a Linked FD then it would generate an interest of 3 to 5% on an average per year. But the biggest advantage is that you can access it at any time you need it. The second option is that you could put this amount of Rs. 2,00,000 in a fixed deposit. This will give you a higher rate of interest from approximately 3 to 5% on an average per year. But in this case you will have a maturity date that is a specific time when you can access this money. So even at times of emergencies you won’t be able to access this money.

You have to note that the ICICI bank minimum amount due is Rs. 10,000. So when your savings account balance drops to Rs. 10,000 then the auto reverse sweep feature is activated. So your FD is broken based on Last-in and First-out due to the automated reverse sweep.

Advantages of Money Multiplier FD

Linked FD gives you the best of the both worlds. So the better option would be to put your money in a linked FD. This allows you to break your FD anytime you want as per your convenience and needs. Also it is not at all compulsory to visit the bank in person to close your linked FD where as you have to be present in case of normal FD’s. It is one of the most flexible options as it gives you the freedom to just withdraw or transfer the funds as you do in your savings account. The biggest advantage is none other than liquidity. You always have the freedom to use your money whenever you want so you have the full accessibility towards your money.

Also not only liquidity but higher interest rate is also the game changer. The interests you get on a linked FD are much higher than that on the usual savings account. There is no need to go to the bank for any formalities or paper work. You can also use net banking. Also it allows you to have partial withdrawals. On top of that your money stays secure as no market fluctuations can affect your rate of interest.

Disadvantages of Money Multiplier FD

Now looking at the disadvantages we cannot ignore the fact that your interests are taxed upon. Interest gained are also charged with TDS (tax deducted at source). Banks deduct this at the end of each year. Also the interest rate remains the same for the entire tenure that is till the maturity date.

Eligibility Criteria

The eligibility criteria to have a Money Multiplier FD (fixed deposit) is –

1. You should have a savings account at ICICI bank.
2. You should have an average minimum balance of Rs. 10,000 to be eligible for Linked FD (fixed deposit).
3. In case of Special Resident savings account you should have a minimum account balance of Rs. 30,000.

Activate Money Multiplier FD via iMobile Pay

Steps to activate Money Multiplier FD (fixed deposit) via iMobile Pay Mobile Banking App-

1. Login to your account.
2. You will see and interface where you have to click on ‘Accounts and Deposits’.
3. Then select Deposit FD or RD from the drop-down menu.
4. Once you click on deposit FD or RD you will see options like open FD , open FD add ons and open RD.
5. Now you have to choose the open FD option.
6. From all the options now available you have to select the ‘Customise your FD’ option.
7. Once you select this option you will then see options to customise your tenure or investment period.
8. Then you have to choose the ‘Money Multiplier’ option.
9. Now you have to scroll down and you will come across three options that are 390 days, 3 years and others.
10. Choose whichever is the most suitable and convenient for you.
11. Then if you want to have auto renewal, you will have to select ‘On’. Or on the other hand it will remain off.
12. Now after finally selecting your best possible options you have to click on ‘SUBMIT’.

Activate Money Multiplier FD via Net Banking

Steps to activate Money Multiplier FD (fixed deposit) via net banking –

1. Go to the website and login to your account.
2. Click on ‘Bank Accounts’.
3. Choose deposits from the drop-down menu.
4. Now you have to select the fixed deposit option.
5. You then have to click on ‘Create FD’.
6. Once you scroll down you will see a money multiplier FD option.
7. Click on ‘Apply now’.
8. Now you have to choose the amount but keep in mind that the minimum amount is Rs. 5000.
9. You then have to select the time period.
10. Click on ‘I agree to the terms and conditions’.
11. Finally click ‘Submit’.

Conclusion:

We looked at all the factors and it is safe to come to the conclusion that linked FD (fixed deposit) is one of the best options. ICICI bank is one of the banks that offers Linked FD (fixed deposit). This is also called as ICICI bank money multiplier plan. If you have an Indian savings account at ICICI bank then you can take privilege of this facility. Not only one but you can link more than one FD to this account. This can be done by sending a request by visiting the branch, net banking or by phone banking etc. Also the bank lets you maximise your amount at the best possible rate of interest for a period of 390 days. You should also note that the interest that you gain on reverse sweep will be as per the specifically applied rate decided for the given specific time period the FD is held with the bank. In case of penalties you have to subtract the premature withdrawal penalty, if any. Now for the leftover amount you will gain a higher rate of interest according to the rate that was originally applicable on the FD.

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