What makes a Systematic Deposit Plan a good monthly investment scheme?

Know all the details about the monthly investment scheme, Systematic Deposit Plan.
5 mins
16 Mar 2023

There are numerous choices available nowadays for making investments depending on your risk appetite, investment objectives, and liquidity requirements. While risk-averse investors prefer trustworthy tools like fixed deposits (FDs), those who favour a high risk-to-return ratio choose market-linked options like equities and mutual funds.
FDs usually give better yields than savings accounts, thus it is prudent to invest money for a longer tenure. An alternative to this is a monthly investment scheme called Systematic Deposit Plan (SDP), which provides you with the freedom to make small regular deposits while also offering safe investment options.

What is a Systematic Deposit Plan?

A monthly investment scheme, SDP is like a fixed deposit, but with the flexibility of making small regular investments instead of a lump sum. Every deposit you make via your Systematic Deposit Plan is treated as a new FD. Moreover, the interest accruing on every new deposit is calculated on the prevailing interest rate the day the deposit is made. You can choose an investment tenure ranging from 12 to 60 months and make regular monthly contributions to grow your wealth. SDP works like an RD, where the monthly deposits you make earn interest rates that are comparable with the prevalent FD rates.
For example, if you invest in an SDP of Rs. 5,000 for a tenure of 19 months with 6 deposits on 3rd of the January. Then you make a total of (6 +1) deposits, which include the first deposit made on 7th January.
You will pay subsequent deposits in February, March, April, May, June, and July. Each deposit you make is a fresh FD, at the interest rate applicable on the deposit date.

Types of Systematic Deposit Plan:

Single maturity scheme:

In the case of a single maturity scheme, all your deposits mature in August 2024. So, each deposit matures on the same day but has different investment tenure. With a single maturity scheme, you only receive payment once at maturity for the money you invested over time in returns. In other words, every contribution you make has an identical maturity date. This aids in your acquisition of a sizable lump-sum corpus at the tenure's finish. Such systemic deposit plans have investment terms ranging from 19 to 60 months and the number of deposits that you can make ranges from 6 to 47.

Deposit

Investment date

Tenure

Maturity date

1st

January 7, 2023

19 months

August 2024

2nd

February 7, 2023

18 months

August 2024

3rd

March 7, 2023

17 months

August 2024

4th

April 7, 2023

16 months

August 2024

5th

May 7, 2023

15 months

August 2024

6th

June 7, 2023

14 months

August 2024

7th

July 7, 2023

13 months

August 2024


Monthly Maturity Scheme:

In case of monthly maturity scheme, all your deposits have the same tenure, but will mature on different months. With the Monthly Maturity Scheme, you can choose a tenure between 12 and 60 months and pay your deposits in any number of instalments between 6 and 48. However, each new contribution will be subject to the chosen tenure. The deposit returns are due when the deposit matures according to the chosen tenure. You gain from guaranteed and consistent monthly returns with this kind of Systematic Deposit Plan.

Deposit

Investment date

Tenure

Maturity date

1st

January 7, 2023

19 months

August 2024

2nd

February 7, 2023

19 months

September 2024

3rd

March 7, 2023

19 months

October 2024

4th

April 7, 2023

19 months

November 2024

5th

May 7, 2023

19 months

December 2024

6th

June 7, 2023

19 months

January 2024

7th

July 7, 2023

19 months

February 2024


How to invest in a Systematic Deposit Plan

You can invest in an SDP online, by filling in your investment details, personal details, and completing your KYC. For SDP e-mandate is mandatory to automate your monthly payments. This is an online, one-time registration process of setting up a payment instruction to debit your verified bank account. In other words, you authorize Bajaj Finance Ltd to debit your bank account towards the SDP amount.
You can either avail it online or offline. E-mandate / NACH registration allows for easy auto-debiting of payments/ EMIs/ investments from your registered bank account basis the agreed frequency.
If you prefer to submit the NACH mandate offline, locate the FD branch near you, and our representatives will help you.
You can set up an e-mandate online when applying for an SDP. You can register the e-mandate using your net banking and/or debit card details, and through an OTP sent to your registered mobile number. However, the availability of these options depends on your bank.

Systematic Deposit Plan interest

The interest rate for each deposit of SDP can vary based on the interest rate applicable at the time of investment.

SDP rates for customers below the age of 60

Systematic Deposit Plan annualised rate of interest for customers below the age of 60 is valid for deposit of up to Rs. 5 crore (16 July, 2024)

Bajaj Finance Digital SDP

New Product Launch
Tenure in months
Customers below 60 years of age (p.a.)
42* 8.40%

Customer below the age of 60 – Special Period

Tenure in months
Customers below 60 years of age (p.a.)
18* 7.80%
22* 7.90%
33* 8.10%
44* 8.25%

Customer below the age of 60 - Regular Period

Tenure in months
Customers below 60 years of age (p.a.)
12 - 14 7.40%
15 - 23 7.50%
24 - 35 7.80%
36 - 60 8.10%

SDP rates for customers above the age of 60

Systematic Deposit Plan annualised rate of interest for senior citizens is valid for deposit of up to Rs. 5 crore (16 July, 2024)

Bajaj Finance Digital SDP

New Product Launch
Tenure in months
Senior citizens (over 60 years of age) (p.a.)
42* 8.65%

Senior Citizen – Special Period

Tenure in months
Senior citizens (over 60 years of age) (p.a.)
18* 8.05%
22* 8.15%
33* 8.35%
44* 8.50%

Senior Citizen – Regular Period

Tenure in months
Senior citizens (over 60 years of age) (p.a.)
12 - 14 7.65%
15 - 23 7.75%
24 - 35 8.20%
36 - 60 8.35%

In conclusion, a Systematic Deposit Plan is a great way to save and grow your money over time. By setting aside a fixed amount of money on a regular basis, you can easily build a nest egg without having to worry about the timing of the markets or trying to time your investments. Additionally, by using a Systematic Deposit Plan, you can take advantage of the power of compound interest, which can help your savings grow even faster. Overall, if you are looking for a simple and effective way to save for your future, a Systematic Deposit Plan may be the perfect solution for you.