Bank Smart. New ways to earn reward points

You no longer need to splurge on your credit card to earn reward points. Now, banks are increasingly rewarding customers for other transactions — from timely loan instalment payments to moving your transactions online or on to your mobile phone. These programmes are a part of the banks’ efforts to reduce cash and offline transactions.

You may be eligible for these reward programmes, irrespective of whether you are a customer of a public sector or private bank. Some banks automatically enrol customers in this programme once they start using at least one of the services covered. Others may require them to register online or through an app. Once registered, you will be able to check the points you have earned.

Points can be earned for a wide range of transactions. For instance, SBI’s State Bank Rewardz covers usage of alternative channels such as internet and mobile banking, timely payment of home loans and opening of demat accounts, outside of debit cards and personal banking.

Shopping online using ICICI internet banking can get you one point for every ₹100 spent when your minimum purchase value is ₹200. Banks such as HSBC also offer rewards for inward and outward foreign currency remittances.

SBI also awards you two points for every ₹1,000 of auto, education or personal loans repaid. Likewise, timely servicing of Kisan Credit Card accounts and agri-term loans also gets you reward points. Besides individuals, SME business owners have a chance to get up to 3,000 points by maintaining a higher average quarterly balance.

You may also be rewarded for operations that don’t involve money. For instance, HSBC offers points when customers update their contact details through the internet banking service.

Skipping some services can be rewarding as well. For example, an SBI customer who does not request a cheque book in a year earns 20 points.

How many points you earn depends on the nature and amount transacted. For instance, Axis Bank customers earn 800 to 1,200 points on a one-time basis for opening an Axis Direct Account. The points earned depend on the minimum balance of the account. Likewise, ECS transactions can get you 5, 10 or 15 points per transaction based on the amount.

Once you accumulate a sufficient number of points — which can be as low as 300 in some cases — you can redeem the points online, on the mobile, over the phone or at physical outlets. One simple use of the points is to recharge your mobile or DTH service online or at over 6,000 outlets.

Many banks have tied up with a large number of partner locations where the points can be redeemed. ICICI Bank, for example lets you redeem by simply swiping your card at the bank’s online partner websites such as makemytrip.com ,  futurebazaar.com,  bookmyshow.com  and outlets such as Central, Pantaloons and Big Bazaar. 

Other banks use the Max Get More network to offer a wide range of merchant partners in categories such as jewellery, apparel and electronics, says Bijaei Jayraj, MD and CEO, of Loyalty Rewardz, a loyalty program service provider for many banks.

In addition to spending, SBI also lets you donate your points for charitable causes to a wide range of non-profit organisations.

First, when signing up, make note of what transactions are covered, number of points you get and whether there is a cap. For instance, Axis Bank offers rewards for a maximum of five ECS transactions per month.

You must also note that some banks may offer rewards only for ATM transactions at the banks own ATMs. So you may need to watch out for such restrictions.

Two, look for conversion rates. In most programmes, if you have four points, you can redeem them to buy product or service worth ₹1.

However, check for special offers on products and services. For example, Axis eDGE rewards programme lets you buy select products with a discount.

Your rewards may also expire. For example, your SBI reward points expire in 36 months. Be sure to redeem them.

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