Bajaj Finance has recently launched the Systematic Deposit Plan that gives you the flexibility to invest in an FD with small, monthly deposits starting from Rs. 5000. Each deposit will be booked at the interest rate prevailing on the date of deposit and can be treated as an individual FD.
The number of monthly deposits can be between 6 and 48 depending on your convenience. The tenor of these deposits can be selected from 12 to 60 as per your financial planning. You will receive the maturity amount for each of the monthly deposits in a series, after completion of the SDP tenor. For example, if you choose to deposit Rs. 6000 for 24 months and choose a tenor of 1 year then your first deposit will mature on the 13th month, the second deposit will mature on the 14th month, and so on.
Key features of SDP
- Interest rate
The SDP interest rate is the same as the interest rate offered on Bajaj Finance FD. This can stand anywhere between 7.6% and 8.1% based on the tenor chosen by you. However, this SDP interest rate is as per the current prevailing interest rate which is subject to change and can affect your overall ROI by up to 4 bps.
Remember that the SDP interest rate increases as you increase the tenor of the investment.
- Premature withdrawals
You can withdraw your deposits prematurely provided that they have completed at least three months under the SDP. The charges for premature withdrawals will be as per the current RBI regulations.
- Predicting returns
You can use the SDP calculator to predict returns from your SDP investment. You simply need to input the values for the monthly deposit amount, tenor, and the number of deposits. The SDP calculator has built-in functionality to calculate the interest rate and maturity amount.
Benefits of opening an SDP account
- Better returns than a savings account: After meeting the monthly expenses, some amount is left out in our salary accounts or regular savings accounts. However, it does not fetch us any sizeable interest as the interest rate offered on the savings account is on the lower side. It is a wise decision to move these monthly savings into an SDP account as this can multiply the savings.
- Less documentation: You only have to submit the KYC documents, a cheque, and a NACH mandate to open an SDP account. Moreover, you will not be charged with a penalty if you miss out on one of the deposits.
- Loan against deposit: Loan can be availed against each deposit under Systematic Deposit Plan. In this way, you continue to grow your savings without affecting the rest of the deposits in SDP.
- Hassle-free savings: The monthly deposit date can be selected (from the 3rd, 7th, or 12th date of each month) as per your convenience. Also, the amount required for the deposit will be automatically deducted from your bank account through a NACH mandate. Therefore, you don’t have to remember the dates or deposit the amount manually. Moreover, for stopping the SDP payments, you just have to cancel the NACH mandate. This makes SDP a hassle-free savings tool.
Joint SDP accounts can also be opened.
Credit rating organizations like ICRA and CRISIL have rated Bajaj Finance FDs highly for their safety and stability. Therefore, with SDP investment, your savings are completely immune from market risks.
As each monthly payment is considered a new deposit, laddering of deposits is inbuilt in SDP. You can choose the tenor smartly to cover your future expenses. Therefore, SDP is an ideal savings tool for those who do not have a large amount to invest in FD but still want to reap the benefits of a fixed-income investment.
