Types of deposits – Fixed Deposit (FD), Recurring Deposit (RD), Systematic Deposit Plan (SDP)

For those looking to grow their savings with safety and convenience, Fixed Deposit and Recurring Deposits are one of the most preferred savings options. But, the Systematic Deposit Plan (SDP) by Bajaj Finance is the latest entrant in the deposit category, which can help regular savers get assured returns with monthly contributions. Before deciding how to grow your savings, it is best to know about these different types of deposits in detail.

What is a Fixed Deposit (FD)?

A Fixed Deposit (or FD) is one of the most preferred financial instruments, which enables you to invest a lumpsum amount to earn assured returns. The lumpsum amount you invest in FD, remains locked for a specified tenure you choose, during which your savings accrue interest. The interest on your Fixed Deposit is pre-decided and remains unaffected by market forces. Investing in FD can help you reap the benefit of flexible tenures, periodic interest payouts and assured returns.

What is a Recurring Deposit?

A Recurring Deposit (or RD) is an investment instrument that helps you deposit savings at regular intervals, until the end of tenure. The interest is accumulated and credited back to the deposit holder, after completion of tenure, which can range from 6 months to 10 years.

What is a Systematic Deposit Plan?

Systematic Deposit Plan (SDP) by Bajaj Finance combines the convenience of SIPs (Systematic Investment Plans) along with assured returns, to help regular savers grow their savings in a recurring manner. With flexible tenures and deposits starting just Rs. 5000 per month, you can choose to grow your savings with Systematic Deposit Plan by choosing any of its two variants:

  • Monthly Maturity Scheme – This variant of SDP enables you to make monthly deposits with returns on a monthly basis, wherein the deposit you make every month, matures as per the chosen tenure. You can choose to make deposits in the range of 6 to 48, and choose flexible tenures ranging from 12 to 60 months.
  • Single Maturity Scheme – With this variant, you can choose to get your maturity proceeds on a single day. However, once you choose the tenure while making your first deposit, the tenure for all your subsequent deposit(s) is regulated to mature on the same date. Thus, when choosing this variant, your choice of tenure and number of deposits must be as per the grid below:

*Grid 1

Maturity payout of all deposits Count of deposits
(excluding the first deposit which will be received through internet banking, e-mandate or cheque)
Choose only one of the below Choose only one of the below
After 24 months of first deposit 6 - - -
After 36 months of first deposit 6 12 - -
After 48 months of first deposit 6 12 24 -
After 60 months of first deposit 6 12 24 36
 

Systematic Deposit Plan offers greater flexibility and ease of investing, which enables regular savers to get assured returns on monthly savings pool.

Difference between FD, RD and SDP (Systematic Deposit Plan)

 

Fixed Deposit (FD), Recurring Deposit (RD) and Systematic Deposit Plan are convenient savings options, which cater to different investment needs. However, it is important to know which of these options can suit your requirements and goals better, so you can get the best returns on your deposit.

Read along to know the differences between these options, to decide which is the best savings plan for you.

What is the difference between Fixed Deposit and Recurring Deposit?

Fixed Deposit and Recurring Deposit are one of the most commonly known savings options in India. The table below highlights the differences between RD and FD.

Particulars Recurring Deposit (RD) Fixed Deposit (FD)
Nature of deposit Deposit a fixed amount every month, for a fixed tenure One-time lumpsum deposit for a fixed tenure
Tenure Ranges from 6 to 120 months Ranges from 12 to 60 months
Interest payout frequency Receive payout at maturity Option to receive payout at maturity, or periodically (monthly, quarterly, half-yearly, annual)
Auto-renewal option Unavailable Auto-renew your FD with additional rate benefit of 0.10%
 

For those looking for a one-time deposit and a convenient savings option, investing in a Bajaj Finance Fixed Deposit can be a great option, as you can reap the benefits of greater flexibility and lucrative returns.

What is the difference between Recurring Deposit and Systematic Deposit Plan?

If you want to grow your savings on a recurring basis, Recurring Deposit and Systematic Deposit Plan by Bajaj Finance can be great savings options. Since there are two variants of Systematic Deposit Plan, here’s a comparison of Recurring Deposit with both variants of SDP:

Particulars Recurring Deposit (RD) Systematic Deposit Plan (SDP)
Monthly Maturity Scheme Single Maturity Scheme
Nature of deposit Deposit a fixed amount every month, for a fixed tenure Deposit a fixed amount starting Rs. 5000 every month, for a fixed tenure Deposit a fixed amount starting Rs. 5000 every month, for a fixed tenure
Tenure Ranges from 6 to 120 months Tenure applicable for every deposit can be chosen from range of 12 to 60 months Tenure for first deposit ranges from 12 to 60 months; and tenure for subsequent deposit(s) is regulated to mature on single day
Number of deposits Ranges from 6 to 120 Ranges from 6 to 48 Ranges from 6 to 36, as per chosen tenure (Applicable as per grid in *Table 1)
Interest payout option Option to receive interest payout at maturity, or periodically (monthly, quarterly, half-yearly, annual) Receive payouts, including interest and principal, on maturity of every deposit on monthly basis Receive payouts, including interest and principal, of all deposits on a single day
Auto-renewal option Auto-renew your FD with additional rate benefit of 0.10% Auto-renew your FD with additional rate benefit of 0.10% Unavailable
Penalty on missed/delayed deposit Yes No penalty or bounce charges applicable No penalty or bounce charges applicable
Interest Rate Remains fixed for all deposits, until the end of chosen tenure The interest rate prevailing on date of each monthly deposit will be applicable to that particular deposit. The interest rate prevailing on date of each monthly deposit will be applicable to that particular deposit.
 

Both variants of Systematic Deposit Plan have their own benefits, while offering more flexibility than a Recurring Deposit.

What is the difference between Fixed Deposit and Systematic Deposit Plan?

Systematic Deposit Plan (SDP) by Bajaj Finance is a kind of recurring fixed deposit that enables you to grow your savings with greater flexibility. If you’re looking to decide whether to invest in a Bajaj Finance Fixed Deposit or Systematic Deposit Plan, here’s a comparison table to choose the best savings plan.

Particulars Bajaj Finance Fixed Deposit Systematic Deposit Plan (SDP)
Monthly Maturity Scheme Single Maturity Scheme
Nature of deposit Deposit a fixed amount every month, for a fixed tenure Deposit a fixed amount starting Rs. 5000 every month, for a fixed tenure Deposit a fixed amount starting Rs. 5000 every month, for a fixed tenure
Deposit amount (Rs.) Minimum lumpsum amount of Rs. 25,000 Minimum deposit of Rs. 5000 per month Minimum deposit of Rs. 5000 per month
Tenure Ranges from 12 to 60 months Tenure applicable for every deposit can be chosen from range of 12 to 60 months Tenure for first deposit ranges from 12 to 60 months; and tenure for subsequent deposit(s) is regulated to mature on single day
Number of deposits No limit on deposits Ranges from 6 to 48 Ranges from 6 to 36, as per chosen tenure (Applicable as per grid in *Grid 1)
Payout option Receive payouts of all deposits on single day Receive payouts on maturity of every deposit, on monthly basis Receive payouts of all deposits on a single day
Auto-renewal option Auto-renew your FD with additional rate benefit of 0.10% Auto-renew your FD with additional rate benefit of 0.10% Unavailable
Interest Rate Remains fixed for lumpsum deposit, until end of tenure The interest rate prevailing on date of each monthly deposit will be applicable to that particular deposit. The interest rate prevailing on date of each monthly deposit will be applicable to that particular deposit.
 

While Fixed Deposit is a great choice for those looking to invest a one-time lumpsum amount, Systematic Deposit Plan works best for individuals looking to grow their savings with small monthly contributions. Investors can also consider raising a lumpsum amount with Systematic Deposit Plan, and re-investing the proceeds in a Bajaj Finance Fixed Deposit. You can reap the benefit of attractive FD interest rates of up to 6.85%, which can help you create a corpus, to fund your financial goals easily.

With the highest safety ratings of FAAA by CRISIL and MAAA by ICRA, Bajaj Finance is a great option for those looking to grow their savings with a Fixed Deposit or Systematic Deposit Plan. Make a smart choice with Bajaj Finance, and lock into attractive interest rates today