The Indian financial market offers a diverse choice of best saving option for prospective customers. An investor has the option to select from a number of market dependent schemes, or investments offering assured returns, depending on their risk-appetite, systematic deposit plan, financial requirement, and investment capability.
One such newly introduced quick savings tool is the Systematic Deposit Plan. It allows an investor to build a large corpus by paying only a small sum every month.
What is a Systematic Deposit Plan?
Systematic Deposit Plan is a quick savings tool, where an investor makes monthly payments instead of a lump sum amount for a Fixed Deposit. Every deposit under this particular savings tool is consider as a separate FD. Accrues interest on a rate that is applicable on the particular day the payment is made.
Systematic Deposit Plan offer several benefits over conventional savings options. It helps create a disciplined savings habit, especially amongst first time investors. The small deposit amount also allows individuals with multiple financial liabilities benefit from this savings tool.
There are several other reasons why a Systematic Deposit Plan can be consider as one of the easiest avenues for risk-free wealth accumulation available in present financial market. Let’s take a look.
Advantages of Investing in a Systematic Deposit Plan
As one of the safest quick best savings option available in Indian financial market, the Systematic Deposit Plan offers multiple features and benefits to customers. These include –
Account holders earn an attractive rate of interest against their deposited sum, ensuring substantial wealth accumulation during the tenor. The determined rate of interest ensures maximum returns against each monthly deposit. Following is a breakdown of the returns earn against a particular tenor.
|Sum of deposit||Total term of deposit||Number of deposits||Interest earned (on each deposit)||Interest earned (total amount)||Maturity amount|
Seniors citizens are eligible to enjoy additional interest over and above the applicable rate. One can calculate their deposit period using an SDP calculator to maximise their returns.
This quick savings tool is ideal for risk-avert individuals. The Systematic Deposit Plan offered by Bajaj Finance acquired high credit rating from both CRISIL and ICRA, making them suitable for everyone.
The total period can be selected by customers while opening an account, offering certain flexibility to help with asset appreciation. Usually, financial institutions offer tenors ranging from 12 to 60 months, which can be paid via 6 to 48 deposits. Such flexibility allows both long and short-term financial planning.
Prospective customers can open a Systematic Deposit Plan account with as low as Rs.5,000. Moreover, they can also choose to make monthly deposits on 3rd, 7th, or 10th of every month depending on their liabilities. The rest of the deposits are made on the same date selected at the beginning.
Deposits made towards an SDP are simplified with the NACH facility, where the payable sum is automatically transacted from the depositor’s account to the respective financial institution. Only the 1st payment has to be made with a payee cheque, as it authenticates the customer’s account for the NACH mandate.
Flexible Withdrawal Facility
Customers can enjoy a hassle-free withdrawal facility with their Systematic Deposit Plan. Financial institutions allow withdrawal of one or more deposits past a minimum of 3 months from the date of issuance. Also, if a customer requires financial assistance but does not want to liquidate their savings, he or she can avail a loan against the deposit amount and continue with the savings tool.
Choice of Tenor
As a term investment option, individuals have the option to choose the tenor for which they want to save in a systematic deposit plan. While the minimum tenor for investment must be that of 12 months, individuals have the option to choose a higher duration which can go up to 60 months. This convenience of tenor offered under Systematic Deposit Plans from reputed NBFC Bajaj Finance allows investors to plan their investment according to their financial goals.
Convenient Deposit Amount
The periodic deposit amount for this savings option begins at Rs.5,000. This low sum of money allows individuals to begin investing even at the beginning of their career when their earnings, as well as savings, are not yet high. Along with the substantial SDP interest rate, investors can be assure of a substantial corpus within a few years of beginning their savings.
Ease of Payment
Investors must clear their first payment with an account payee cheque to sync their financial account with their systematic deposit plan account via NACH facility. Once synced with the financial assessment account, the amount of money is regularly deposit on the fixed date.
Choice of Deposition Date
While remarkable SDP interest rates make this a feasible savings option, additional features make it one of the best. Individuals have the option to choose from 3 dates for deposition. The offered choices are 3rd, 7th or 12th of the month.
Loan against deposit is subject to applicable norms of a particular financial institution, as an SDP is a feature of a Fixed Deposit. Customers can also withdraw their account whenever necessary, and cancel the NACH mandate at the same time.
Along with all the above mentioned features, Systematic Deposit Plan can also have the provision to apply for a joint account, and charges no penalties in case a customer fails to pay a particular month’s deposit. However, in this case, the depositor’s bank may levy some fine for dishonouring NACH mandate.
Systematic Deposit Plan can easily be considered as one of the best savings option, providing assured, high-yield return to customers. It provides the features of an SIP, without exposing the invested amount to market risks. Investors can choose this option for maximum benefit and wealth accumulation within a short time.
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