Systematic Deposit Plan is one of a kind option as it offers the opportunity to save a small amount each month. Besides the unique concept, the several features and benefits that accompany SDP in India make it popular among individuals. To elaborate, the minimum deposit value and liquidity of the savings tool are among its major features. Regardless, individuals who wish to put money into this savings option should learn about its different offerings to weigh its advantages.
What are the features of this plan?
Monthly savings plan
The Systematic Deposit Plan extended by Bajaj Finance requires individuals to put a minimum of Rs.5,000 each month as a deposit amount. Such a feature comes in handy for depositors in two ways. Firstly, it helps inculcate a disciplined approach to savings. Secondly, it helps to build a reliable corpus eventually by mobilising a small portion of savings.
This savings tool comes with a flexible tenor and allows individuals the freedom to choose the frequency of deposits. Typically, the tenor ranges between 12 months and 5 years. Individuals can choose a suitable tenor depending on their financial goal and put money into the deposit scheme accordingly.
For example, if someone is planning to go on a family vacation, they can opt for a tenor of 2 years and build a reliable travel fund. Similarly, if someone intends to save for their child’s higher education, they may choose a longer tenor of 5 years.
Subsequently, account holders can use a systematic deposit calculator to assess the monthly pay-outs and maturity value of each deposit to gauge the impact of their chosen tenor.
Automatic payment facility
The Systematic Deposit Plan offers an automated payment facility under NACH. As per the mandate, a fixed sum of money gets debited from depositor’s account each month and deposited into this savings option automatically. Such a facility offers depositors freedom from the fear of missing out on their deposit date and helps focus on managing other aspects of their finance.
SDP in India has a high liquid aspect and serves as a reliable financial back up in case of a financial crisis. It does not just allow depositors to withdraw prematurely from their deposits but also allows them to avail a loan on them as well.
Notably, such prematurely withdrawals follow RBI guidelines and are applicable to those deposits which have been continued for at least 3 months. On the other hand, to avail a loan against deposits, individuals are required to adhere to certain conditions as laid by the NBFC.
The financial institution requires applicants to follow a simple documentation process to opt for a Systematic Deposit Plan. For instance, applicants need to submit their KYC documents along with the NACH mandate and a cheque. Additionally, they are directed to make their first deposit by cheque to have their account registered to their deposit account.
6. Risk free
The savings tool serves as a safe arena for risk-averse individuals as it is not among the market-linked financial products. Through this savings option, individuals are entitled to accrue guaranteed returns.
Joint account facility
Bajaj Finance also offers depositors the opportunity to open an SDP in India jointly. The said feature comes in handy in several ways. To begin with, it facilitates the generation of greater returns owing to combined savings. Also, the account can be continued even after one of the joint account holder’s demise. Moreover, the procedure to open a joint Systematic Deposit Plan account is similar to the process of opening a regular fixed deposit account.
8. Transparent charges
SDP in India extended by Bajaj Finance is quite transparent in terms of charges. Notably, the financial institution does not charge deposit holders a fine on missing out of scheduled deposit date. It prevents individuals from incurring any additional financial liability and protects their savings.
What are the benefits of systematic deposit plans?
The following offers an overview of the significant benefits –
- Can be started with a small deposit amount without straining one’s available purchasing power.
- Serves as an emergency fund and can also be used to build a reliable retirement corpus.
- Offers better returns when compared to most traditional savings option.
- Helps to develop a disciplined approach towards savings.
Hence, it can be said that the unique features and their associated benefits make SDP in India one of the top savings options. The NBFC’s financial product does not just help individuals to make the most of their savings but helps them develop a positive attitude towards financial planning.