FD Vs SDP: Which is Right for You

Know all the details about FD and SDP and which investment option is good for you based on multiple parameters.
FD or SDP
4 mins
26 February 2024

Investing is a sure-shot way of generating wealth over time. Idle savings are no good when it comes to beating inflation because they do not increase in value just stashed away in a savings account. When you invest them in financial tools with a good interest rate, you can make more money. The earlier one starts the better it is. This is because you can take advantage of the power of compounding.

When it comes to safe investments Fixed Deposits top the chart because they are reliable and give decent returns as well. Individuals can use this investment tool to park their long-term savings as a retirement fund, down payment for a house or car, or even as an emergency fund. Usually, bank FDs give lesser returns so if you aim to yield more you can invest in a company FD with good credit ratings. These financial institutes might not be government-backed but function under the tight scrutiny of the RBI making them safe investment avenues.

Bajaj Finance is one such financier that offers deposits at lucrative fixed deposit interest rates and ensures the complete safety of funds. With deposits starting at just Rs. 15,000 this is an excellent tool for even those who do not have a sizeable corpus to invest in one go. This FD also comes with a suite of other benefits. Apart from this, they offer another alternative to investors that has a monthly saving option like a SIP but practically functions like an FD. You can make small monthly deposits starting at just Rs. 5,000 and grow your corpus over a fixed tenure. With both these options available choosing the one that suits you can be a little confusing. Here is how you can choose between FD and SDP.

Pro tip

Enjoy higher interest rate with Bajaj Finance Digital FD. Unlock returns of up to 8.85% p.a. by investing for 42 months via our website and app.

Fixed Deposit (FD)

  • Interest rates up to 8.85% p.a.
  • Flexible tenures
  • Non-cumulative periodic payout option
  • Stable and secure investment option
  • Online investment process
  • Loan against FD facility
  • The minimum deposit amount is Rs. 15,000

Open an FD

Systematic Deposit Plan (SDP)

  • Interest rates up to 8.85% p.a.
  • Flexible tenures and deposits
  • Single Maturity Scheme for cumulative payout
  • Monthly Maturity Scheme for monthly payout
  • Stable and secure investment option
  • Online investment process
  • Loan against FD facility
  • The minimum deposit amount is Rs. 5,000

Invest in SDP

The basic differences between the Fixed Deposit (FD) and Systematic Deposit Plan (SDP) offered by Bajaj Finance

Difference

Fixed Deposit

Systematic Deposit Plan

Minimum deposit amount

Rs. 15,000

Rs. 5,000

Interest Payout

At maturity, unless you choose non-cumulative FD

At maturity for the Single Maturity Scheme
Monthly for Monthly Maturity Scheme

Interest on FD and SDP

Remains fixed for all deposits, until the end of the tenure

The interest rate prevailing on the date of each monthly deposit applies to that deposit

Number of deposits

You make one initial deposit as a lump sum amount

You make monthly contributions as deposits


Choosing the plan that fits you best

The Fixed Deposit (FD) is a perfect option for investors who plan to grow a corpus and are not looking to use those funds in the short term. The amount received at maturity can be used to fund post-retirement expenses or fulfill financial goals or can even save the day in case of emergencies. However, you need to have a lump sum ready to invest. But with the minimum investment amount of Rs. 15,000, it is easy for new investors also to venture in without affecting liquidity majorly.

The Systematic Deposit Plan (SDP) on the other hand is more of a monthly savings scheme. Young investors who cannot invest huge amounts in one go can take advantage of this monthly income investment plan. It is a great way of inculcating the habit of regular monthly savings. When you further look into the two variants the Single Maturity Scheme is perfect for those looking to achieve a short, or mid-term financial goal and the Monthly Maturity Scheme is a regular monthly savings plan that can help you get multiple monthly payouts while maintaining desired liquidity. This is the best monthly investment scheme for those who are looking to fund recurring expenses.
Having said this, you can now evaluate which investment option is best for you based on your income, financial goals, and liquidity requirements.
Calculate FD returns

Frequently asked questions

What is the Digital FD offered by Bajaj Finance?

Bajaj Finance has launched a new FD variant called "Bajaj Finance Digital FD" for a period of 42 months. Bajaj Finance is providing one of the highest interest rates of up to 8.85% p.a. for senior citizens and for the customers below the age of 60 they are providing up to 8.60% p.a. The Digital FD can be opened and managed only through the Bajaj Finserv website or app.

What is a systematic deposit plan?

A systematic deposit plan (SDP) is a financial investment plan where an investor regularly deposits a fixed amount of money into a savings or investment account systematically over a pre-determined period. The frequency of these deposits can be monthly, quarterly, or any other defined period. The purpose of an SDP is to provide an opportunity to accumulate savings or make investment easier by investing a small amount regularly over a long period.

How do you benefit from investing in an SDP?

Investing in an SDP offers disciplined savings, potential for higher returns, and flexibility in deposit amounts.

What is a Fixed Deposit - FD?

A Fixed Deposit (FD) is a financial instrument where a lump sum amount is deposited for a fixed tenure, earning a predetermined interest rate.

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Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.