The Tamil Nadu based Karur Vysya Bank is planning to launch a recurring deposit scheme that will provide the investors flexibility in deposit amounts to be paid monthly. The new product is being launched with the aim of restoring small investor's interest in the recurring deposit segment.
Banks seem to have lost their interest in this segment of deposits since it gives low returns, especially in times of volatility in interest rates in the economy. Recurring deposits schemes are popular among small investors who lack lump sum amounts for investment but instead can pay fixed monthly amounts.
Talking about banks losing focus in this segment of fixed deposit schemes, Mr. K. Venkataraman, Managing Director and CEO of the bank said that the bank is working on a flexi recurring deposit product that will provide the bank increased yields and will be more beneficial to the depositors. The product being developed by the bank provides flexibility in the amounts to be deposited by the customers. It is expected to benefit small and medium traders.
It is to be noted that such schemes have been launched in the past by other banks also, but they failed to generate interest among the investors and did not work in the market.