4 min read
25 May 2021

Investing in a fixed deposit is a great way to grow your savings, especially as you get assured returns unaffected by market fluctuations. Investing in FD often requires you to set aside a lump sum amount, which accrues interest over time. However, raising a lump sum amount for investing may not always be possible, especially for regular savers. Bajaj Finance has hence, introduced the Systematic Deposit Plan, an industry-first monthly savings option that can help you start saving with just Rs. 5,000 per month.

If you’re looking to understand Systematic Deposit Plan (SDP) in greater detail, read on.

What is a Systematic Deposit Plan?

Investing in a Bajaj Finance Fixed Deposit just got easier with Systematic Deposit Plan – a monthly savings option that lets you make bite-sized deposits starting Rs. 5,000 per month. This unique, one-of-a-kind provision allows you to commit to a monthly savings tool that emulates the ease of investing that comes with a Systematic Investment Plan (SIP). However, unlike SIPs that are market-linked, a Systematic Deposit Plan offers guaranteed returns at maturity. Thus, you can save small amounts each month and do away with the need to accumulate a lumpsum deposit.

How does the Systematic Deposit Plan work?

The overall operation of the SDP is fairly straightforward. You make monthly deposits and each of these count as a new deposit. Each deposit is booked at the interest rate applicable on the day of deposit, as per your customer type. You can make a one-time decision to contribute either on the 3rd, 7th or 12th of every month until the last deposit is made. The number of deposits you can choose to make ranges from 6 to 48. While the first payment must be paid by cheque, subsequent payments must be automated via a NACH mandate issued in favour of Bajaj Finance Limited.

What are the benefits of saving with a Systematic Deposit Plan?

Besides the fact that the SDP has made FD investments even more budget-friendly, you also enjoy a range of benefits when you choose it. Here are details on the 5 benefits of saving with Systematic Deposit Plan.

1. Assured returns

With Systematic Deposit Plan, you make monthly FDs that offer assured returns. Bajaj Finance Fixed Deposit has the highest safety ratings of FAAA by CRISIL and MAAA by ICRA, which indicate the highest safety of your investment amount. Additionally, Bajaj Finance, with a deposit book of nearly 20,000 crores has an impressive clientele of 2,50,000+ FD customers.

2. Attractive interest rates

A significant upside to opting for a Bajaj Finance FD is that it offers great interest rates. With Systematic Deposit Plan, this benefit is extended to every deposit you make as each deposit is a fixed deposit in itself. This way, you enjoy earnings through a given investment window, which is particularly beneficial when the applicable interest rate is increased.

For a more in-depth understanding of the interest rates, refer the tables below.

New Customers

Annual rate of interest valid for deposits from Rs. 25,000 up to Rs. 5 Crore (w.e.f. from 12 May 2021)

Tenor in months

12 – 23

24 – 35

36 - 60

Cumulative

5.65%

6.10%

6.50%

Monthly

5.51%

5.94%

6.31%

Quarterly

5.53%

5.97%

6.35%

Half-yearly

5.57%

6.01%

6.40%

Annual

5.65%

6.10%

6.50%


Senior Citizens

Annual rate of interest valid for deposits from Rs. 25,000 up to Rs. 5 Crore (w.e.f. from 12 May 2021)

Tenor in months

12 – 23

24 – 35

36 - 60

Cumulative

5.90%

6.35%

6.75%

Monthly

5.75%

6.17%

6.55%

Quarterly

5.77%

6.20%

6.59%

Half-yearly

5.82%

6.25%

6.64%

Annual

5.90%

6.35%

6.75%


You can also use the SDP Calculator to plan your savings, before you start saving.

3. Convenient, automated payments

Another notable benefit of Systematic Deposit Plan is that it offers a convenient and simplified mode of saving. To get started, all you have to do is submit a cheque for your first deposit, and in doing so, you also register your bank account for future deposits. After which, you can automate payments every month by submitting a NACH mandate issued in favour of Bajaj Finance Limited. This way, payments are directly deducted from your account and FDs are booked in your name as per your particulars.

In case you can no longer continue to keep up with deposits, you can cancel your NACH mandate at any time and stop making deposits.

4. Start saving with just Rs. 5,000 per month

Saving with Systematic Deposit Plan is very convenient, and you can start with just Rs. 5,000 per month. This enables you to start saving each month without having to build a significant investment corpus. This is highly beneficial for those looking to diligently save a percentage of their earnings without disturbing their monthly budget.

5. Loan against FD

When saving with fixed deposits, you need to set aside your savings, which accrue interest over time. However, you may need money to address urgent requirements, which warrants immediate finance. When investing in Bajaj Finance FD, you not only get to withdraw prematurely, provided your investments have crossed the 3-month mark from the date of issuance.

You can also avail of a loan against fixed deposit from Bajaj Finance, so you can fund emergencies without losing any interest. A loan against FD can be of immense help during emergencies, as you have access to liquid funds.

6. Disciplined savings

As the minimum deposit amount when investing via Systematic Deposit Plan is Rs. 5,000 only, young earners with limited earning capability can quickly work towards two financial goals at once. As you’re required to make monthly deposits, a Systematic Deposit Plan can end up becoming a savings tool that enables you to build a corpus to invest in future.

You also end up developing financial discipline, as you maintain a budget that accommodates monthly savings. Further, starting to grow your wealth in the earlier stages of your employment years allows you to enjoy greater yield due to compounding interest and helps you build a sizable corpus over an extended period of time.

7. Make smarter investment decisions

FD interest rates are affected by the repo rate issued by the RBI, and while making these monthly deposits, you can understand how these reforms affect your deposits. You’ll also find out how repo rate changes affect your interest earnings, as every payment books a new FD on that given day at the applicable interest rate. Further, this information can also play a fundamental role in the decision-making for financial borrowings.

8. Tailor investments to align with your financial goals

When saving with Systematic Deposit Plan, you can select the number of deposits you wish to make and choose a tenor for each. The number of deposits you can make ranges from 6 to 48, and the applicable tenor for each deposit ranges from 12 to 60 months.

Systematic Deposit Plan vs other investment options

With a unique and one-of-a-kind proposition, Systematic Deposit Plan enables you to enjoy distinct perks that enable you to stand out from other investment options. Here is a detailed explanation of how Systematic Deposit Plan compares with other commonly availed offerings in the market.

1. Systematic Deposit Plan vs Recurring Deposit

When you save with Recurring Deposit, your deposit matures at a specific date in future, along with all deposits made each month. However, unlike a recurring deposit where you receive an accrued maturity amount, Systematic Deposit Plan offers periodic returns.

Additionally, when saving with Systematic Deposit Plan, you don’t incur any bounce charges for missing a monthly deposit. But, this is not the case with options like a recurring deposit where you are charged a penalty for non-maintenance of funds. However, do note that you can get penalised by your bank for NACH dishonour.

2. Systematic Deposit Plan vs Systematic Investment Plans

Systematic Deposit Plan and Systematic Investment Plans are both convenient investment options, but you can enjoy superior investment security and the promise of guaranteed returns with Systematic Deposit Plan.

This is not the case with other investment modes like SIPs, which route your money to mutual funds. Thus, your returns depend on the market performance of the assets you’ve invested in. Thus, if you’re looking for assured returns without the risk of losses or delays, Systematic Deposit Plan is the best option to choose.

3. Systematic Deposit Plan vs Provident Fund

Saving with Systematic Deposit Plan and Provident Fund can ensure guaranteed returns, but SDP offers higher flexibility over PF. Unlike a Provident Fund investment that has a lengthy lock-in period of 6 years, savings made with Systematic Deposit Plan have a lock-in period of just 3 months. This means that you can prematurely withdraw funds at any point after the stipulated window easily.

Who should save with SDP?

Systematic Deposit Plan is an excellent offering for all kinds of investors and regular savers, but the purpose it serves for each varies vastly. To understand this variance and gain insight into matching your savings plan with your goals, read on.

1. Youngsters looking to meet goals of saving and investing

It can be challenging for young earners to consistently contribute to their savings and put aside a sum for investments. However, these practices are key to wealth generation, so the SDP features enable these in a simplified manner. By allowing bite-sized monthly deposits, as a youngster, you can contribute to your savings and invest at the same time.

2. Experienced investors looking to ladder investments efficiently

For experienced investors, the SDP feature allows you to take advantage of laddering. Here, you can tailor your investments based on your upcoming financial obligations and leverage your finances most efficiently. By investing in deposits and opting for the right tenor, you can fund any of your goals and set up a stream of constant income as well.

3. Senior citizens looking for a stable way to enhance their retirement corpus

The SDP feature allows you to park your retirement corpus in a stable and reliable instrument. This is key to sustaining your wealth and building on it as risky options can severely cost you in your non-earning years. Further, Bajaj Finance offers higher FD interest rates for senior citizens, making this approach more beneficial.

Armed with this knowledge, take advantage of this super saver investment scheme and contribute to your financial goals in a smarter and targeted manner. To avail of the service right away, fill the online application form and authorise a Bajaj Finance representative to contact you.

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