Systematic Deposit Plan or SDP is one of the ideal savings plans in India that can be availed without the need for a substantial corpus in a month. Both newly employed or self-employed individuals can opt for this savings tool. Further, the fact that it is a risk-free investment avenue makes it a viable option for both young and risk-averse individuals.
Additionally, the other features and benefits of this plan further make it one of the most beneficial savings tools for many. Regardless, to make the most of such savings plan, it is essential to pick the best SDP plan to invest in.
Subsequently, individuals should also find out the different ways to benefit from the plan in the best way possible.
Features of the Systematic Deposit Plan
An effective Systematic Deposit Plan comes with these following features that enable individuals to save more successfully –
The Systematic Deposit Plan comes with a flexible term of the deposit that ranges between 1-5 years. Further, leading institutions like Bajaj Finance allow individuals to pick a convenient date to make their monthly deposit. Notably, the date hence selected remains the same for the following deposits as well.
Systematic Deposit Plan offers interest rates up to 7.6% to deposits. This rate can go up to 7.85% for senior citizens. Notably, these rates are higher than on regular savings accounts.
The best SDP plan to invest in India tends to ease the payment process for their customers. For instance, some financial institutions may require their customers to make their first deposit through an account payee cheque. Also, they may allow them to forward subsequent deposits through automated NACH mandate.
Systematic Deposit Plans from leading NBFCs allow its account holders to withdraw from one or more of their deposits prematurely as per RBI’s guidelines. However, account holders must realise that such a facility can be availed on deposits which have been active for more than 3 months.
Loan Against Fixed
Individuals are permitted to avail a loan against their existing deposits. Nonetheless, such account holders must find out about the related terms and conditions set against such a facility in advance to streamline the process better.
Most Systematic Deposit Plans also extend the facility to open a deposit account jointly. Usually, the steps involved to open such an account are similar to that of opening a joint fixed deposit account.
These features and their resulting benefits tend to facilitate the process of savings effectively. Hence, it is vital to look for the best SDP plan to invest in that comes with similar features to enhance their scope of strengthening their savings.
Benefits of Saving in Systematic Deposit Plan
These following benefits tend to make such a deposit plan a feasible savings avenue –
Small Deposit to Save More
Unlike a fixed deposit, individuals do not have to deposit a substantial lump sum amount to open a Systematic Deposit Plan. In fact, the minimum deposit amount is Rs.5,000, which can be quickly mobilized each month to build a robust savings amount until the maturity period. Further, being a monthly deposit plan, account holders would be learning how to priorities their savings and manage their finances efficiently.
Since this savings plan does not tend to be influenced by the prevailing market conditions, account holders are assured of receiving a guaranteed income. Also, it prevents one’s savings from being eroded at the hands of market forces. This risk-free aspect of the savings plan is what draws the attention of most youngsters, making it a safe avenue for savings.
One of the best features of the Systematic Deposit Plan is its liquidity. Deposit account holders do not need to dip into their goal-oriented funds like retirement corpus to meet a financial emergency. Instead, they can opt for the premature withdrawal facility or avail a loan against their existing deposits to cater to their financial needs better.
Flexibility to Choose the Maturity Period
Individuals have the freedom to select a suitable maturity period while opening their systematic deposit account. Since such plans come with a flexible maturity period, it would help them pick a tenor that matches their long-term or short-term financial goal.
Subsequently, they can use a reliable systematic deposit calculator to make a more informed decision when it comes to selecting a suitable maturity period.
No Additional Charges
Most deposit plans do not levy unwanted charges on the account holders. For instance, Bajaj Finance’s Systematic Deposit Plan does not implement a bounce charge when a depositor misses out on the deposit date. In turn, it helps depositors from paying unwanted fees.
In a nutshell, features like monthly payment, liquidity, and negligible bounce charges make Systematic Deposit Plans a useful savings tool. Regardless, one must opt for the best SDP plan to invest to avail the best of features.