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Guaranteed return products are undoubtedly very popular among us Indians. We use at least one of these products, say, bank deposits, NSC, KVP, PPF, REC Bonds, etc., to pick up a decent fixed return. For long, the market was dominated by the government-backed guaranteed return products, but now private players have entered the fray to give them a stiff competition. Sensing the money-making opportunity, private players have experimented with capital protection plans and market-linked guaranteed return plans. The latest offering is by ICICI Prudential which has introduced ICICI Pru Pinnacle, a guaranteed return unit-linked insurance plan (ULIP). But the question remains as whether this plan will succeed in attracting investors by offering something new or fall flat.

Retail banking in India has undergone a sea change in the last two decades. The change is visible everywhere, right from operations to products. However, the real benefits of a new thing are realised only when it is utilised completely. For example, in retail banking, savings accounts hold a special place as customers use them for their day-to-day transactions like salary transfer, loan repayment, electronic clearing services (ECS) payments. But these accounts offer a very little interest on savings, i.e., 3.5 per cent! On the other hand, a traditional fixed deposit carries an interest rate of 7 to 8 per cent.

Rajiv, a ICICI Bank customer, received a call from the bank executive informing him about ‘Advantage Deposit’ – a new product with dual benefits of a fixed deposit and a mutual fund. Now, Rajiv’s curiosity is roused as he has invested consistently into various fixed deposit schemes. But he is not gung ho about its [...]