What is a Systematic Deposit Plan?

When it comes to saving and investment options, there are quite a few avenues one can explore today. In other words, you can decide to park your money in lucrative investment avenues depending on your risk appetite, investment goals and liquidity needs. While investors favouring a high risk-to-return ratio opt for market-linked options like equities and mutual funds, those who are risk-averse find reliable tools like FDs a better fit. You can use the fixed deposit interest calculator to determine the returns you would earn on your investment to make better financial decisions.

While fixed deposits offer higher returns than savings accounts, you need to park a lump-sum amount for an extended period to enjoy such returns. This may be difficult for people who have just entered the job market. In such cases, a systematic deposit plan comes in handy.  

Systematic deposit plans help eliminate the one-time investment pressure of FDs by allowing you to pace out your investment over a monthly basis. Thus, with a systematic deposit plan, you can invest small amounts every month to earn high returns and build a corpus over time. Much like an FD, SDPs are safe from market-linked fluctuations and offer guaranteed returns. In a nut-shell, you get to enjoy an investment opportunity that combines the security of an FD with the flexibility of monthly contributions.

In an FD, you make a one-time deposit and this lump-sum continues earning the same interest for the investment tenor. However, Systematic Deposit Plans work a little differently. For starters, every deposit you make via your Systematic Deposit Plan is treated as a new FD. Moreover, the interest accruing on every new deposit is calculated on the prevailing interest rate the day the deposit is made.

You can choose an investment tenor ranging from 6-60 months and make regular monthly contributions to grow your wealth and cultivate a healthy savings habit. Thus, a Systematic Deposit Plan works like an RD, where the monthly deposits you make earn interest rates that are comparable with the prevalent FD rates. 

Booking a Systematic Deposit Plan is pretty simple if you:

• Are a resident Indian of 18 years or above

• Can produce copies of your PAN Card 

• Can produce the requisite KYC documents like Aadhaar Card/passport/voter’s ID, etc.

• Can produce proof of address like utility bills, municipal tax receipt, etc. 
   

Note: SDP accounts can also be opened on both an individual and joint basis. There are special guidelines for minors opening SDP accounts.   

Before you start saving through a Systematic Deposit Plan, it’s prudent to review the tenor options and applicable interest rates. Here’s the latest rates applicable on a Bajaj Finance Systematic Deposit Plan:

If you wish to see your money grow at a higher rate of interest, you can opt for any one of the following special tenors and earn cumulative returns.

It is important to estimate your returns from SDP before you opt for this saving tool. A Systematic Deposit Plan single maturity scheme calculator helps identify your earning for a given tenor with all your deposits maturing on the same day. You can access a Systematic Deposit Plan calculator online and better plan your financial portfolio. 

To use this digital tool, you have to first select the applicable customer type. In other words, you have to choose between senior citizen and non-senior citizen options. You will then have to input your monthly investment amount and pick a desired tenor for your SDP. Lastly, you will have to pick the number of deposits from the drop down menu. Once that’s done, the SDP calculator will automatically display your maturity amount, interest earned and maturity date.

• Monthly Maturity Scheme

Under the Monthly Maturity Scheme, you can pick a tenor ranging from 12-60 months and make your deposits 6 to 48 instalments. However, this selected tenor is applicable to each new deposit. The returns from the deposit is payable when the said deposit matures as per the applied tenor. This type of Systematic Deposit Plan brings you the benefit of assured and steady monthly returns. 

Say for instance, you’ve picked a tenor of 2 years and decided to complete your investment in 7 deposits. Then you’re returns will be scheduled as: 

*Standard tenor applicable to all deposits. 

• Single Maturity Scheme

With a Single Maturity Scheme, the returns from the amount that you invest over time is paid to you once at the time of maturity. In other words, every deposit you make has the same maturity date under this plan. This helps you acquire a large lump-sum corpus at the end of the tenor. The investment tenor for such Systematic Deposit Plans range from 19 to 60 months and the number of deposits you can make varies from 6 to 47. 

Say, for instance, you choose to invest in a Single Maturity Systematic Deposit Plan for 2 years in 6 instalment, then, your maturity schedule will look like this: 

*Subsequent deposit tenors reduce with the progression of the plan to ensure all deposits mature on the same day.