FD or SDP: which is a better investment option for you

Know all the details about FD and SDP and which investment option is good for you based on multiple parameters.
4 mins
14 Oct 2022

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 grow your 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 are regulated by RBI, making them safe investment avenues.

Bajaj Finance is one such financier that offers fixed deposits at lucrative 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, we also offer another alternative to investors, called Systematic Deposit Plan (SDP) that has a monthly saving option with the security of fixed deposit. 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.

Fixed Deposit (FD)
• Interest rates up to 7.95% p.a.
• Flexible tenures from 12 to 60 months
• 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 7.95%.p.a.
• Flexible tenures from 12 to 60 months
• Single Maturity Scheme for single 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 both the single maturity schemeand 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. 5,000, it is easy for new investors is start investment and earn returns.
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. There are two kinds of investment variants under Systematic Deposit Plan – Single Maturity Scheme and Monthly Maturity Scheme.
With the single maturity scheme, you get your investment amount along with the interest on maturity. However, with the monthly maturity scheme each deposit you make matures on a different month, and the investment amount and interest for each deposit is paid on different months. 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