Invest in Systematic Deposit Plan: High returns monthly investment scheme

Here is all the details about Systematic Deposit Plan and how it can help you earn higher returns with small monthly investments.
4 mins
14 Oct 2022

Fixed deposit (FD), one of the most effective ways to multiply your investments, requires a sizeable sum of money to invest for better returns. For young people with little earning potential, this is somewhat challenging. Financial institutions like Bajaj Finance provide the finest investment choice in this circumstance: Systematic Deposit Plan (SDP). The key features of SDP enable you to take advantage of the steady growth of an FD at a very low investment.

1. What is Systematic Deposit Plan?
Systematic Deposit Plan, a modified version of fixed deposit, enables you to make small periodic investments and earn interest on them. Starting an SDP is easy as the minimum investment amount is as low as Rs. 5,000. This amount is well within reach of those with lower earning potential.

SDP gives you a choice of making multiple monthly deposits over a 12 to 60-month period. Additionally, you can automate your monthly deposits by setting up standing orders from your bank account. However, you need to make a cheque payment for your first deposit.

2. How Systematic Deposit Plan works?
SDP uses the power of compounding to give your investments exponential growth. SDP is an excellent option as the interest rates are consistent over the tenure and provide solid returns. You can easily start an SDP with a little investment of Rs. 5,000 over a maximum tenure of 60 months. It also offers you the best returns of up to 7.95% p.a. for a special tenure of 44 months.

With SDP, you have the choice of two different payouts:

1. Single Maturity Scheme (SMS)
2. Month Maturity Scheme (MMS)

In the Single Maturity Scheme, you immediately receive your returns (principal and interest) once your FD is mature. For instance, Mr. Kartik wants to invest in SDP (Single Maturity Scheme) with 30 deposits of Rs. 5,000 for tenure of 44 months. Taking the start date of SDP as October 1, 2022, and the interest rate applicable to be 7.50% p.a.

Mr. Kartik will get a total payout of Rs. 1,85,985 upon maturity on Jun 2026. Total interest earnings on the deposits will be Rs. 30,985.

In the Monthly Maturity Scheme, you receive returns every month after you reach the maturity date. You can securely grow your money in this way.

For instance, Mr. Arvind wants to make 6 deposits of Rs. 15,000 for 12 months tenure in SDP. Considering the start date as November 1, 2022, and the interest rate applicable to be 6.35% p.a.

Mr. Arvind will be receiving monthly payouts as:

Month No.

Deposit month

Deposit amount (Rs.)

Maturity month

Monthly payout (Rs.)

Total payout (Rs.)

01

Nov – 2022

15,000

Nov – 2023

15,952

1,11,667

02

Dec -2022

15,000

Dec -2023

15,952

1,11,667

03

Jan - 2023

15,000

Jan - 2024

15,952

1,11,667

04

Feb - 2023

15,000

Feb - 2024

15,952

1,11,667

05

Mar - 2023

15,000

Mar - 2024

15,952

1,11,667

06

Apr - 2023

15,000

Apr - 2024

15,952

1,11,667

 

In MMS, you will start getting your payouts monthly after completing the tenure. You will earn an interest of Rs. 952 on each deposit. The total monthly payout that you will be receiving after 12 months will be Rs. 15,952.

Your total interest-earning will be Rs. 6,667. and your total payout will be Rs. 1,11,667. You will start getting these payouts from the 13th month onwards from your first deposit.

Click here to start an online SDP by Bajaj Finance and take a step forward in your investment journey.