Fixed Deposits (FDs) are preferred investment avenues in India as they offer assured returns at relatively lower risks. However, minimum deposit and lock-in period requirements may keep you at bay from FD investments. This is more often the case if you cannot invest a lumpsum amount in one-go or are wary of interest rate risks or both.
Does that mean small investors with low-risk appetites can never invest in an FD? Absolutely Not. Recurring Deposits (RDs) solve this problem to a great extent. RDs allow you to deposit small amounts each month and earn guaranteed returns at a fixed interest rate. However, RDs do not eliminate interest rate risks.
A Mutual Fund (MF) SIP scheme may be your one-stop solution for investing small amounts monthly and minimizing interest rate risks. However, it is a market-linked instrument that is not going to offer you stable returns at pre-determined rates.
So, is there a unique financial product that combines the benefits of an FD, RD, and MF SIP? Let us find out in consecutive paragraphs.
Monthly deposit plans
From the stables of Bajaj Finance Limited – a renowned name in the financial services industry comes a unique offering known as Systematic Deposit Plan (SDP). It is a perfect blend of the valuable features of an FD, RD, and MF SIP. Some of the unique characteristics of an SDP are listed below:-
Minimum deposit requirements
Unlike an FD, you don’t need a lump sum corpus to invest in an SDP. You can open a Bajaj Finance SDP with just Rs 5000 in your pocket each month. Based on your long-term or short-term goals you may either choose the Bajaj Finance monthly maturity scheme or single maturity scheme.
Monthly maturity scheme:
This is an ideal monthly saving scheme if you wish to invest small amounts on a regular basis. Under this scheme, you are allowed to make 6-48 deposits. The tenor you choose is applicable for all deposits. A striking feature of this scheme is that each deposit will mature on a different date. Thus, varying deposit maturity dates may also help you in meeting your regular liquidity needs. Moreover, you can renew deposits under this scheme.
Single maturity scheme:
This is a good monthly saving scheme if you wish to build a lumpsum retirement corpus. Under this scheme, all your deposits will mature on the same date. Thus, the tenor of each subsequent periodic deposit goes on decreasing.
Interest rate
A unique feature of SDP schemes is that they even out your interest rate risks in the long-run. Each monthly installment is invested at the prevailing interest rate on the date of deposit. Thus, the risk of your money being locked-in at lower interest rates is minimized. Moreover, Bajaj Finance SDP schemes have a mandatory lock-in period of just 3 months.
SDP calculators
Computing your returns from an SDP investment is a complex procedure. However, Bajaj Finance has built-in SDP and fixed deposit calculators on its website that calculate your SDP returns instantly. The fixed deposit calculator enables you to know your returns even before undertaking an investment.
Tenor
If you wish to invest for a longer haul, say 5 years, then Bajaj Finance SDP may be a good option for you. Bajaj Finance allows you to choose any investment tenor between 12-60 months. You can make deposits on the 3rd, 7th, or 12th of each month.
Other value-added features
Bajaj Finance offers premature withdrawal and loan-against-deposit facilities on its SDP scheme too. Moreover, you just need to make the first deposit payment through a cheque. Subsequent deposit payments will be auto-debited from your bank account through the NACH mandate issued in favor of Bajaj Finance.
Final word
Booking a Bajaj Finance SDP online is an easy, paperless, and hassle-free process. The Bajaj Finance SDP and fixed deposit calculators are indispensable tools at your disposal to know your returns beforehand. In other words, your search for the perfect monthly savings scheme ends with Bajaj Finance SDP.
