This innovation will now enable Indian businesses to utilize the idle balance in their current account and potentially earn higher returns than FDs without a lock-in period while providing access to a variety of investment options.
tarrakki, a fast-growing comprehensive wealth management start-up, today announced the launch of a trailblazing solution – Elevo that will enable Indian businesses to earn on the unutilized capital in their bank accounts for the very first time.
tarrakki is building India’s first non-individual investing platform which will onboard customers like startups, SMEs, MSMEs, NRIs, HUFs, proprietorships, partnership firms, minors, etc. completely online with seamless technology.
This innovation will now enable Indian businesses to utilize the idle balance in their current account and potentially earn higher returns than FDs without a lock-in period while providing access to a variety of investment options. Declining interest rates at banks continue to be a major deterrent for individuals and businesses alike.
Currently, Indian businesses do not have any digital investment options other than Fixed Deposits. There are 2 challenges here-
● One is that they barely earn 2.5% interest on the investment
● Another challenge is to pay penalties for premature redemptions of FDs that further brings down the interest earned
With this thought of low liquidity, they prefer to keep their idle funds in current accounts where there is no interest earned.
Currently, Indian businesses do not have any options for harnessing idle funds to create wealth in a current account nor do they earn any interest on that idle capital. In fact, business account holders end up paying hefty penalties for premature withdrawals and a fee for even keeping the account active.
tarrakki identified this existing gap and has innovated to bridge the same with a first of its kind wealth creation /investment infrastructure that currently entails solutions such as mutual fund offerings with plans for adding other asset classes soon. All the solutions are tailor made specifically for businesses to ensure flexibility in investment and options of withdrawing the funds for operations as and when needed.
Commenting on the occasion, Mr. Saumya Shah, Founder, Elevo(powered by tarrakki)said, “What excites us the most is bringing ingenious solutions to the table that enable wealth creation for everyone. When we saw the potential to unlock value for wealth creation space for businesses it was a no-brainer as it’s been a white space in the wealth management domain so far. Our infrastructure is the first of its kind in India, and we hope to educate young Indian businesses on how to best optimize their idle funds and more fuel to the growth engine of India, the swelling start-up and SME sectors and of course add further impetus to corporate India’s growth too.”
He further adds, “The idea behind Elevo is to be where the new age investors are going. While the Indian wealth management industry is in the midst of significant change: a new generation of investors, whose expectations and preferences have been shaped by new technologies and by their living through the last financial crisis, have brought new standards to the industry in terms of advice and investment. However, a larger unlocked potential for wealth creation in our country still remains untapped. That of businesses exploring investment options as a form of wealth creation. There is no longer just one type of investor; and the current market is not geared to serve all types of investors. We want to cater to the investors who have never been tapped before i.e.- the non-individual investors. One of the advantages of Elevo is that it allows corporates to digitally invest into asset classes other than FDs – like Liquid and Short Term Debt Funds. India has over 63million MSMEs. Even if 70% of this pool of SMES adopts digital investment they can play a critical role in achieving the 100trillion AUM target set by AMFI.”
tarrakki is focused on providing infrastructure for wealth management services along with creating new innovative solutions in line with their mission to enable everyone to create wealth. The startup also provides a customizable suite of APIs that fintech players and financial institutes can use to provide investment capabilities to their clients. The API solutions are designed in such a way that any BFSI partner will be able to instantly add wealth offerings using our API suite and will be able to onboard non-individual PAN cards like proprietorships, partnerships, private and limited companies thereby opening up digital wealth solutions to a plethora of new investors. Along with the API solution, tarrakki is also working on a SDK solution that would further reduce the integration efforts for their partners by taking them live in 2-3 weeks with the ability to offer every mutual fund from tarrakki’s network of 45 AMC partners.
Elevo also offers a module for minor investing that allows the investment for newborns. Currently, tarrakki’s youngest investor is a 10 month old toddler. .
Source: Business World