The Hindu Business Line : ING Vysya MIP to come with freebies

A FREE personal accident insurance cover for three years, a free debit card and a free demat account. All this and more are yours if you choose to invest in ING Vysya Mutual Fund's latest offering - a monthly income plan.

Listed in the offer document of ING Vysya MIP fund are certain "additional features", which partly bundled in the shape of a savings bank account from ING Vysya Bank. The bank allows a savings account holder to maintain a minimum balance of Rs 5,000.

However, investors applying for the fund's IPO will have the option of opening an account without any minimum balance.

The mutual fund, it must be added, has specifically mentioned that the matter of providing extra benefits "is subject to completing all formalities and procedures laid down by ING Vysya Bank and has to be in accordance with the RBI regulations applicable to banking accounts."

It is nevertheless stated that the account together with its benefits will be available to investors applying for units during the IPO period as long as they remain invested in the fund.

So what are being made available? Here's the list.

Free personal accident insurance cover of Rs 3 lakh for three years.

Free annual accident hospitalisation cover of Rs 35,000 for three years.

Free Samband international debit card (accepted at 35,000 establishments).

Free demat account

Zero commission on demand draft up to Rs 2 lakh.

When contacted for comment, Ms Kavita Hurry, MD and CEO, ING Vysya Mutual Fund, said the proposal is based on the fund's close association with the parent bank. "We are keen to leverage this association. These are value additions that we thought would be important for investors," she noted, adding that these will not enhance the fund's costs in any way.

It must be mentioned that the mutual fund has added a few key caveats. One, an investor can apply without opting for the saving account facility. Two, it is possible that certain services and benefits may not be available in the location where he or she resides. Three, the fund does not guarantee the performance or service standards related to the bank account.

Mr A.P. Kurian, who heads the Association of Mutual Funds in India, maintained that he was not immediately in a position to make specific observations on the matter. "Insurance benefits are not uncommon in the realm of mutual funds," he said, referring to schemes that have been packaged with insurance covers. In recent times, these have been launched by the likes of SBI mutual fund.

Loyalty bonus for senior citizens

SENIOR citizens who decide to invest in the MIP will get a `loyalty bonus' of 1 per cent of the face value of the units held as on December 31, 2004, subject to terms and conditions mentioned in the offer document.

Units, for instance, should be bought during the IPO period and be continuously held from the date of allotment till the very end of 2004. The loyalty bonus will be disbursed in the name of the first holder.

It is also pointed out that such bonus will be paid by the asset management company and not be charged to the scheme. The payment will be subject to taxes, if applicable, the offer document has stated.