The ‘Save Now, Buy Later’ scheme is gaining much traction because it encourages you to save to buy things and is also an investment option! Let’s explore more about it.
No matter how digitally we grow these days, a part of us always believes in the traditional practices taught by our parents, especially when managing money. Remember, they always encourage us to save before buying the things we wanted.
These days we see a very similar upcoming trend in the town. Many FinTech apps encourage users to ‘ Save Now, Buy Later ’. Let’s find out what this scheme is all about.
We all have used the ‘Buy Now, Pay Later’ scheme. It is a credit scheme. It encourages people to buy things now and pay instalments in the upcoming months with interest. So, you practically buy something you cannot pay for upfront.
But, with changing times, as loans are becoming costlier, people have shifted their focus from spending to saving. And this new scheme ‘Save Now, Buy Later’ helps you do that.
How Save Now, Buy Later Works?
Let’s say you wish to buy a new watch which costs Rs 10,000. In the Save Now, Buy Later option, you pay instalments to the merchant of Rs 2,000 per month. In return, the merchant gives you a discount or may offer interest on the invested amount.
Which FinTech Apps are Offering This Service?
FinTech startups like Tortoise, Multipl, and Hubble have introduced this scheme to tie savers and brands together.
These apps allow you to pay the EMI directly to the merchant. In return, you would get a discount as you are parking your funds with them in advance.
Now, you might wonder, where does this accumulated money go? Does the merchant keep it in his/her bank account?
Well, that’s not true.
- Multipl allows you to invest your money in mutual funds. It also allows you to save money directly with the merchant.
- Hubble deposits your money in an escrow account with its partner bank, and you get a 10% discount on your purchase.
Now, travel companies are also cashing on this trend. EaseMyTrip has launched a new product – Save Now Buy Later, to help you plan your vacation better. All you need to do is start an SIP with EaseMyTrip, and they will offer you an interest of up to 20% on your invested amount. Later, you can use the amount for travel bookings.
Save Now, Buy Later is an innovative scheme that will help you plan your big purchases. Moreover, it will help you avoid impulsive purchases, which we otherwise do using credit cards.
But remember, you get a discount or interest only when you are dedicated to making the purchase. If you decide to withdraw the money, you will be left with just your principal amount and zero interest.
Till now, the scheme is in a nascent stage. We will see when others will join the path.
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