Smart Accounts - Smart Savings

Continuing my previous post titled "Smart Accounts", I am writing adding to that idea here.

I was "Grocery" shopping with my wife at my favorite place in Gurgaon (Spencer's Hyper - Megacity Mall) when this tiny small idea crossed my mind. We all buy stuff like mats, utensils, water filters etc that have a short lifespan of say 6-12 months. Then we need to buy them again either because of their condition or a new upgraded product is in the market.

The idea is to create sub accounts inside the main account in which people can save small amount of money for each of these items. So if you 3 items that you want to change in the next 12 months, you start saving for them from the day you bought this one:

12 months LifeSpan
Door Mats (3) - 1200
Non-Stick Pan - 1500
Water Filter - 1900
Save: 4600/12 = 384/month


2 years Lifespan
Desktop - 30,000
Inverter Batteries - 8000
Mobile Phone - 12000
Save: 50,000/24 = 2084/month

The total amount i.e. 2084 + 384 will be transferred automatically to these sub accounts after the user sets them. Banks can calculate the actual interest that the person will earn when he starts putting this amount aside every month (e.g. according to 3.5% on Saving Bank Account). The total interest and the reduced number of EMIs can also be shown. For e.g. @ 3.5% per annum rate of interest, the total interest earned in 23 months will be around Rs. 2065 so 1 EMI will be reduced. Other options such as the benefit of starting an Mutual Fund SIP can also be shown which can yield an attractive interest rate of close to 10% per annum.