1001 Startup Ideas- Startup That Makes You Do Impulsive Savings

The startup idea is to build a platform where people can see, evaluate and make micro investments by the way of fixed deposits. The idea is to tie up with Banking and Grade A financial institutions to offer great deals on saving deposits for limited hours or days enticing the end consumer to make impulsive micro saving deposits through the portal. The platform will be the “Groupon” of saving deals across the country.Market DefinitionFor every economy, savings are important for the country to cater to its domestic investment needs. Therefore, Governments encourage savings by offering tax rebates to households. India has always been on the higher side in household savings, with up to 67% in some years. India’s gross household savings rate was 23% in FY 2014 against USA’s 5.03% in 2013.Disposable Personal Income in India increased to $2082 billion in 2015 from $1927 billion in 2014. With the disposable income growing at 8.5% and projection of Indian household saving remaining around 25%, the market offers huge surplus, which will be invested back into the market.Below is the data how Indians invest their saving,•    22% invest in life insurances•    21% invest in fixed deposit schemes•    9% invest in mutual funds•    14% invest in PPFs•    7% invest in gold•    27% OthersIt may be good to focus primarily on fixed deposits only at the first stage.Competitor AnalysisThere are companies like ‘Bankbazaar.com’, which offer bank products on its websites like personal credit cards and personal loans through its website and Policybazaar, which offer insurance product online. There will be a first-mover advantage in this space as no company has entered into the area of making savings products readily available.Pain Point & Target AudienceThe targeted customer market for this business is the “any customer that is looking to make savings”. As on date, very few or no platform has listed all the saving products in the market and provides super saver lightning deals, which give the consumer a sense of thrill when it comes to making money on savings.Currently, customer’s choice is limited to options from the bank in which they have active accounts, due to which they often miss on the better deals. For banks & institutions, they have to invest heavily on offline and online advertisements for customer acquisition. A common investment platform would help both customers and banks to connect seamlessly creating more value.Value PropositionThe customer will get access to an entire gamut of savings products and access to lightning deals for make savings at higher rates that are usually available. Banks will also gain from this relationship, as they can now acquire their target customers at a much lower acquisition cost.Banks will also gain from this relationship, as they can now acquire their target customers at a much lower acquisition cost.Business ModelThe customers can visit the website and access all the savings products available in the market with National Banks & Grade A financial institutions. The platform will be created in such a manner wherein customers can directly make the payment through the website to the institution. The site will charge commission from the banks and institutions for investment in the savings instrument.Way to marketThe biggest chunk of targeted customers is in the Indian market and other developing economies where there is a lot of concentration on saving. It may be a good idea to have initial focus only on India, based on•    Disposable income growth of 8.5% pa•    Sustained saving rate of 25% due to increase in the working-age population over the next decade•    43% of total investors prefer fixed deposits & insurance policiesThe first step is to tie up with tier-1 banks in India for their fixed deposit schemes; after that products will be listed on the platform. A good strategy will be to Integrate online wallet companies so that customer can make payment directly from their wallet to respective bank.  Integrating wallet companies will also help with proper KYC, with no additional cost.MilestonesThe first step is to identify the tier-1 institutions, which will be willing to offer the fixed deposits online. Then there are a lot of banks and deposit taking Grade A Non-Banking Financial Companies in India, which would be euphoric to tie up as they would save on the direct sales channel costs.Investment Needed For PrototypeFor testing & building the prototype, pitch for raising 50K USD from angel investors or incubators like Nasscom 10,000 startups. There should be no office rentals or salary payout; the entire budget should be apportioned for customer acquisition and technology.Team CapabilityYou would need to have a Banker, a legal expert (must) and an e-commerce tech expert. The sector hinges on massive compliance and oversight by RBI and SEBI. You need to have a strong compliance team to ensure hassle free ride. Non-compliance could lead to winding up of the entity.Investors / Expert TakeConsidering the first mover advantage and that India has one of the highest amounts of saving percentages in the world, investors would be looking at this product very favorably. Bankbazaar.com has just raised USD 60 million in Series C funding and Policybazaar has raised USD 40 million in Series D funding. Amazon India, Fidelity Growth Partners, Mousse Partners, Tiger Global and Azim Premji have invested in similar ideas in the past and other investors may follow them .