Financial institutions across the country offer a host of investment opportunities for their customers to generate significant returns. Notably, such investment plans are more likely to require substantial capital. Moreover, their performance and returns are based on various market factors.
SDP plans are offering young investors a risk-averse and assured avenue for savings. Through this savings tool, individuals can earn guaranteed returns. So it can be said that systematic deposit plans offer the same benefits of a SIP (Systematic Investment Plan) but without its obvious market risks.
The systematic deposit plan enables customers to start their savings with just Rs.5,000 every month. Here, every deposit is treated as a separate fixed deposit, and it earns interest according to the prevailing interest rate. Unlike regular fixed deposits, where the entire amount matures at a specified time, and the interest is generated on the lump sum; here every deposit has its own rate of interest, and it generate the additional income on each deposit.
Check out the below-mentioned table to learn more about the current interest (w.e.f December 2019) rates of an SDP plan.
|Tenor (in months)||New investors||Senior citizens||Existing customers/Employees of Bajaj Group|
Benefits of Systematic Deposit Plan
Here is a list of benefits that enables investors to make stress-free savings –
SDP plans allow individuals to start their savings with just Rs.5,000. It is a convenient option for individuals who do not have a substantial corpus in hand.
Flexibility of tenor
Systematic deposit plans offer flexibility in terms of the tenor. It ranges from 12 to 60 months, and investors can opt for any tenor of their choice. However, the minimum tenor here is 12 months.
Apart from the flexibility in terms of tenor, individuals can also choose the number of deposits they want to make within the tenor. It allows individuals to plan their finances according to their need.
Secure and steady returns
The returns offered under this quick savings tool is secured as it is not related to market fluctuations. Additionally, the interest rate on every deposit is fixed, and a steady return is assured. Apart from providing a guaranteed return, this savings scheme has high CRISIL and ICRA rating, which increases its credibility among investors. Investors can use an SDP calculator available on the website of Bajaj Finance to calculate their earnings.
At times of any emergency financial requirements individuals can make a withdrawal from their Systematic Deposit Plan to handle such scenarios. As mentioned before, every deposit made under this savings plan is treated as an individual deposit. Thus, in case of any withdrawals individuals can liquidate a single deposit instead of the whole amount.
Additionally, this savings tool allows an individual to avail a loan against the deposit as well.
Automatic payment methods
SDP plans allow individuals to pay for their regular deposits by streamlining their payments through NACH. After paying for the initial deposit through an account payee cheque, individuals can opt for this automated payment method.
What makes Systematic Deposit Plans a better savings option?
When compared to other regular savings options, SDP plans provide a better savings opportunity owing to the following reasons –
- Systematic deposit plans offer better interest rates compared to several other regular savings schemes. Additionally, this savings plan is not susceptible to any market fluctuations and thus offers assured returns.
- Systematic deposit plan develops a habit of regular savings among investors. Being a monthly savings scheme, it creates a financial discipline among individuals which helps them to plan their future finances better.
- Systematic deposit plans enable individuals to build considerable funds with minimal savings. A monthly deposit of just Rs.5,000 makes it easier for any investor to start their savings. Paired with attractive interest rates and flexible tenor options, it allows individuals to build a substantial corpus as per their requirements.
Since SDP plans are equipped with investor-oriented benefits, it allows them to make the most of this quick savings tool according to their convenience. This regular savings plan helps investors to plan their finance in such a way that they can meet their monetary requirements without any difficulty.