Now earn points on spends from your savings bank a/c

Tags: Banking

Arthashastra

Banks are increasingly offering benefits to individuals for making expenses using their savings accounts. This is a big change from the earlier situation wherein, only credit card spends were eligible for these benefits. The move to get additional benefit for spending money from your own account is something that will be interesting for a large number of individuals and, hence, one has to ensure that all the conditions related to this are known properly.

Nature of benefit: There are different ways in which benefits can be garnered for spends made from a savings bank account. This might not be possible in all cases as not all banks offer benefit on savings account spends. Sometimes it is just certain expenses made from the savings account that qualify for points, which can be redeemed after a specific number is accumulated. The other way to go about the process is to ensure that the debit card is used for several expenses.

Specific spends: The way in which the system works is that there are a certain number of points that are allotted to the individual when they make spends. For example, if an electricity bill is used for online payment through your savings bank account, a certain number of points will be awarded based on the amount. A similar situation would be present for a whole host of conditions and, hence, this would have to be considered. This would also mean that a lot of expenses that are actually made would not be covered and, hence, if you are one who is dealing with this kind of situation then the act might not be very beneficial for you.

Certain additional conditions: The whole process is also not very straightforward in the sense that there are several angles that one needs to consider. It is not that a certain amount spent will enable you to get gifts in return. The process starts with accumulating points. Once the total points in your account cross a certain figure, they are eligible for redemption. Usually, depending on the amount of the points accumulated, there is a category that an individual will fall under. The category will give an idea about the kind of items against which the points can actually be redeemed and the number of points that are required for this purpose.

What is important in the whole exercise is that if you are one who is anyways making these kinds of expenses, then it would be better to claim the benefits. In other situation, there might not be much to gain from the whole process.

(The writer is a CA and certified financial planner)

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