Marching beyond the confines of vanilla savings accounts, new-generation private banks such as HDFC Bank and ICICI Bank have introduced an innovative hybrid savings deposit account, called '3-in-1'.
The account combines features of a savings account, online trading and a demat (dematerialised) facility.
Through this, a bank integrates the account of its brokerage arm, the savings bank account and one or more demat accounts. These accounts are in a dematerialised form to enable the customer to park his shares.
In case of HDFC Bank, the account integrates the customer's HDFC securities trading account with the HDFC Bank savings account and demat account.
The customer can access, and trade or execute transaction in funds/shares through the linked demat/bank account.
To open an integrated account, a customer needs to issue a cheque for Rs 2,500 towards the initial payment of the savings bank account.
Although functionalities are akin to a normal savings account, the minimum balance is much lower at Rs 2,500 vis-à-vis Rs 5,000 for a vanilla savings account.
However, in this case, the brokerage fee for online trading is higher at 0.08 per cent against a normal fee of 0.03 per cent.
Such accounts hold numerous advantages for customers. A 3-in-1 account-holder can place a 'buy' or a 'sell' order on a particular stock. The system checks the funds and the shares available in the savings bank account and the demat account respectively and, then, execute trade on the exchange online.
Both the savings bank account and the demat accounts get automatically debited or credited. The trades are then reported to the concerned bank for onward reporting to the Reserve Bank of India, as required by FEMA regulations.
Another option you could exercise is: place market orders during trading hours, thereby availing of the best obtainable price -- in fact, the customer defines the price of the stock.
The transfer or trading of shares is almost seamless with minimal waste of time during the movement of your funds and shares. Even the orders are placed electronically, so proceeds are instantly available. To prevent any mismanagement, the minute the customer executes an order the concerned bank sends an email confirmation.
Besides regular trading, the customer can also use the account for investing in mutual funds and initial public offers.
You can place a request for investing in a particular fund, which involves no manual processes. Your bank funds and unit holdings get automatically debited or credited simultaneously.
The customer may also access in-depth analyses of new issues/IPOs about to hit the market. An IPO calendar, recent IPO listings, prospectus/offer documents and IPO analysis are a few features that help the customer remain well informed about the IPO markets.
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