SBI savings account offers EMI for holiday expenses; here's how to avail

If you have been meaning to embark on an international trip, or even one closer home, but have been putting it off for financial reasons, then there's some relief for you. State Bank of India and travel company Thomas Cook have partnered up to offer a scheme that allows you to save for a year leading up to the trip. The account is in the form of a recurring deposit with the bank. The customer will, however, only be able to avail one of the listed packages on Thomas Cook's Holiday Savings Account page.

The website offers international trips to destinations such as Thailand, Dubai, Singapore, Singapore and Malaysia, Sri Lanka, and Europe.  One can also opt for Indian destinations such as Kerala, Himachal Pradesh, North East, Andamans, and Kashmir. The monthly deposit amount will differ from package to package.

To avail the scheme, here's what one will have to do:

1. Go to Thomas Cook's Holiday Savings Account site. Pick the package of your choice.

2. The cost of your package will be divided by 13.

3. You will be redirected to the SBI site to set up an e-Recurring Deposit account for 12 monthly installments.

4. Your e-RD will avail interest as per the interest rates for the 12-month period.

5. At the end of the 12 months, the maturity proceeds will be directed to Thomas Cook for the payment of your chosen travel package.

6. Thomas Cook will pay the balance amount i.e. the 13th installment to purchase the package.

However there are a couple of things you must keep in mind. Since the e-RD will be opened for a Thomas Cook package, the account information will be shared with the travel company. The e-RD will be generated in the name of the person whose account is funding it. If the e-RD needs to be closed prematurely, then the money will be credited to the account that initially funded the deposit. In case of premature closure, the bank will also levy a penalty.

There will also be a penalty levied in case of delay in payment.

Once the e-RD reaches maturity, the amount will be sent across to Thomas Cook, unless the customer changes the maturity instruction to credit the amount to the savings account funding the e-RD.

(Edited by Anwesha Madhukalya)