SDP Plans stands for Systematic Deposit Plan. Fixed Deposits (FD) are low-risk instruments with assured returns at a prescribed rate. But, FDs have two major pitfalls. Firstly, you need a lump sum amount for investing. Secondly, FDs are subject to interest rate risks.
Now, you may wonder if there is a financial instrument that not only eliminates these drawbacks but also possesses the advantages of a term deposit.
Well, much to your delight, such an instrument exists. It is known as a Systematic Deposit Plan (SDP) – an FD with a twist. Bajaj Finance is a pioneer in providing SDP plans.
Now, let us understand the advantages of SDP and how you can save your money with this scheme.
SDP is conceived on the lines of a recurring deposit and mutual fund SIP scheme. Like a recurring deposit, you can invest small amounts monthly. Akin to a SIP scheme, your monthly deposits will be invested at the prevailing market interest rates on the date of investment. Thus, you don’t need a lump sum corpus for investment, and interest rate risks are also taken care of.
Bajaj Finance offers two SDP plans. They are as follows:-
- Monthly maturity scheme: Under this scheme, you can make 6-48 deposits. The investment tenure you choose will be applicable for all deposits. Every deposit carries a different interest rate and maturity date. Thus, each monthly deposit is a term deposit in itself. It is an awesome scheme to inculcate saving habits and financial discipline.
- Single maturity scheme: Under this SDP plan, each of your deposits will mature on the same date. Thus, every subsequent deposit will have a lower investment tenure. Auto-renewal of periodic deposits is not possible under this scheme. It is an amazing scheme for building a lump sum retirement corpus.
You need to set aside just Rs. 5,000 per month to invest in Bajaj Finance SDP plans. Bajaj Finance allows you to make monthly deposits on the 3rd, 7th, and 12th of each month. Only the first deposit amount has to be disbursed via a cheque. Subsequent deposit payments will be directly debited from your bank account through NACH.
Other benefits of SDP
Are you worried that an SDP scheme may not fund your contingencies and immediate liquidity needs? If you think so, you are absolutely wrong.
Like a regular term deposit, a premature withdrawal option is available with SDP too. Bajaj Finance permits premature withdrawals on each of the deposits under the SDP plan after a minimum lock-in period of just 3 months.
Moreover, the overdraft or Loan Against Deposit facility is also available on SDP plans. Bajaj Finance allows you to avail of loans up to 75% of the principal amount of each deposit. Thus, like an FD, an SDP plan also helps in tackling financial emergencies.
You can apply for an SDP online too. Bajaj Finance’s online SDP application process is hassle-free and quick. You just need to complete a form and upload scanned copies of the necessary documents. Within 2 days, your credentials and documents will be verified and an SDP will be booked.
On the surface, the computation of returns from an SDP plan may look complex. You can use an SDP calculator to free yourself from this trouble. Bajaj Finance has an inbuilt SDP calculator on its website. You just need to input customer type, monthly investment amount, investment period, and the number of deposits. Your return calculations are instantly displayed. So, you know your gains from an SDP plan even before you invest.
Bajaj Finance offers lucrative interest rates up to 7% p.a. on its SDP plans. If you invest online, you will get 0.10% more. If you are a senior citizen, then you will get 0.25% more. Moreover, Bajaj Finance has high credit ratings by CRISIL and ICRA. So, your money is in safe hands.