Thomas Cook, IndusInd bank to offer holiday savings account

You can save on costs by locking into the holiday package a year earlier

Given the rising air fares and increasing hotel rents, a family holiday also requires some amount of financial planning. You can save for a holiday, but what if costs go up when it is time for your trip? Other options are taking a loan or paying by Equated Monthly Instalments through credit card. However, these schemes can push up costs by up to 30%.

Thomas Cook India (TCIL) has launched a Holiday Savings Account, in a tie-up with IndusInd Bank. Customers have to save in a one-year recurring deposit (RD), which offers interest rate of 9.1%. Customers have to pay 12 instalments. The last instalment, that is, the 13th instalment, consist of the interest earned plus a top-up amount paid by TCIL. When the RD, the money is transferred to TCIL to pay for the holiday package. Customers can choose the monthly amount for the RD, depending on the destination they choose and the package cost.

For instance, the cost of the Kerala Package, per person is Rs 26,802. The customer saves Rs 2,000 per month, which works out to Rs 24,000 for the 12-month RD. The difference is Rs 2,802. Of this, Rs 1,208 is the interest accumulated at 9.1% at the end of the 12th month and Rs 792 is the top up from TCIL.

In case customers are not able to avail of the holiday package, they can withdraw the money like a normal RD. But in that case they will get not the top-up offered by TCIL.

The biggest advantage is that you can book package at the rate prevailing when you start the deposit. By the time the deposit matures, if the rate for that particular package increases, you will still get it at the rate you had locked into.

After the deposit matures, customers have three months during which they can pick their travel dates. If for some reason, they are unable to travel to the destination they have selected, Thomas Cook will give them another option in the similar price range.

Abraham Alapatt, Chief Innovation Officer, Head - Marketing & Service Quality, Thomas Cook India said that the average annual inflation for package holidays is between 14 to 16%. "The scheme will be suitable for those who have a fixed holiday schedule like families with school-going children. Since they know the exact time they can travel, they can save for the holiday and plan accordingly,'' he said.

Currently, TCIL offers packages for six domestic and six international destinations under this scheme. The packages include air fares, accommodation, meals, transfer, sight-seeing.