Some individuals find it difficult to invest in fixed deposits or any other investment instrument that requires a substantial corpus. Therefore, such people tend to go for options like Systematic Investment Plan i.e. SIPs or recurring deposits in which a person can deposit small amounts at regular intervals.
However, SIPs are subject to market risks and recurring deposits provide the same interest rate throughout the tenor. Also, recurring deposits do not allow you to withdraw your deposits prematurely as fixed deposits do, and also offer lower returns.
To provide a better alternative to the customers, Bajaj Finance has introduced Systematic Deposit Plan (SDP) that allows you to invest a fixed amount every month for a specific tenor, thus creating a series of small monthly FDs.
It is a convenient savings tool and first-of-its-kind in India. Each monthly deposit is considered as a separate fixed deposit and therefore, fetches an interest rate that is applicable on the day the deposit is made.
Remarkable features of Systematic Deposit Plan from Bajaj Finance
Amount and payment method
- SDP allows you to start investing with just Rs. 5000 per month.
- The initial payment has to be done via an account payee cheque and the subsequent deposits will be directly deducted from a bank account via NACH mandate.
- Account-holders of any bank can start saving their excess income in SDP.
Tenor
- The specified amount will be deposited in SDP on the 3rd, 7th, or 12th of every month as per your choice. However, remember that you cannot change the date afterwards.
- SDP allows you to select any number of monthly deposits from 6 to 48. Also, every deposit can be locked in from 12 to 60 months.
- For example, if you start saving in an SDP in January 2020 for 6 months, then your SDP of January 2020 will mature in January 2021 or any other year as per the selected tenor.
Liquidity
- Withdrawing the deposits prematurely is possible given that the deposit has completed at least 3 months from the issuance date.
- Charges on the premature withdrawals will be as per the RBI regulations.
Benefits of saving in SDP
Disciplined savings
- Anyone who wants to save a relatively small yet fixed amount of their earnings every month can start saving in an SDP.
- The maturity date, number of savings, and amount are pre-decided by the customer and this makes it a disciplined and hassle-free savings tool.
Secure savings
- Bajaj Finance FDs have received high credit ratings for safety and stability by reputed credit rating organizations like CRISIL and ICRA. Therefore, your savings are safe from market risks.
- You can consider SDP as a savings tool that provides the benefits of a Systematic Investment Plan but without any risks.
No penalty
- No penalty is charged if you miss the deposit date. Therefore, you can start depositing in your SDP account without any worries of penalty or late payment charges.
You can also get a collateral-free loan on your SDP savings. The SDP calculator available on Bajaj Finance portal allows you to estimate your returns in advance. Also, you will receive receipts for each of your monthly deposits.
A joint deposit account can be initiated under SDP. Moreover, you can stop your SDP anytime by cancelling the NACH mandate. All these benefits make SDP a perfect savings tool for everyone and especially for those who have just started earning.