Features Of Systematic Deposit Plan-Secured Returns & Flexible Tenure
An SDP will allow you to realise your money goals and provide peace of mind for your future. You may make money from a wide range of investments. Some may be riskier than others, but all of them provide you with the chance to grow your money. You may put this profit toward saving for retirement or other goals. You can also put it in a fund for when you need to meet some urgent costs.
Systematic Deposit Plan
There are many similarities between the SDP, the RDs, and the FDs, three popular savings plans. When you buy an SDP, you lock in the interest rate and it won’t change no matter what happens in the market. A variable interest rate will be applied to each monthly deposit, which will be the only new aspect of SDPs. If you invested for a year, the amount of return you received each month would vary.
Benefits of a Systematic Deposit Plan
You can invest fixed-income assets at a time or can space them out over a period. It would help if you learn about how the current rate on FDs will impact the returns on any new FDs you may start. It is easy to start saving money without any pressure on your financial plan. An SDP financial institution requires a deposit of at least Rs 5,000 per month. Here are some benefits of SDP that you must know:
Easy to Start
You can save time, and effort, and get rid of stress with SDP. It helps you in breaking down the process of investing into smaller chunks and start with a few simple steps. Starting an SDP is much easier than going to the bank and waiting in a long line or filling out loads of paperwork.
Better Stability
Investors who take part in the SDP enjoy peace of mind as their money is safe from losses. CRISIL and ICRA have placed a high credit rating on SDP institutions due to their strong financials. Hence, the investments in question are risk-free.
Assured rate of interest
Investors in SDP can save money monthly and receive their returns all on the same day. There is no need to wait until a large sum of money has been collected. This allows you to maximise your earnings.
Systematic Approach
Investors can create a corpus for urgent needs with as little as Rs. 5,000 per month. You can make the initial payment using a bank cheque or a credit card. You can also make payments via NACH. The funds for such payments will be debited from your bank account on a given date.
Flexible Investment
The Single Maturity Scheme is suitable if you have a major need for money but can only set aside a small amount each month. You have the option of selecting terms from 12 to 60 months. You can contribute on the seventh and the twelfth of each month and the first, third, and fifth of each month. You will only need to choose a date once, which will be used for all the next payments.
No Cheque Bounce Fees
You are not subject to a penalty if you fail to make a monthly deposit. This feature is available when you participate in the SDP’s Single Maturity Scheme rather than the Monthly Maturity Scheme. The variant of the Single Maturity Scheme combines the benefits of SIPs and SDP to give the best of both worlds. This scheme is of great interest to young investors as it combines the best features.
Investors can get to their goals with little capital outlay and have access to the benefits of FDs. The SDP is a way to save money that helps you progress from being an average investor to a remarkable one. When you learn some basic finance skills, then you can start exploring other options that can offer better returns.
Organise your wealth into different buckets
“Laddering” refers to starting many fixed deposits with varying maturities. There is a specific maturity date and withdrawal limit for each SDP. These may be put to use in a wide variety of situations and for a wide range of goals. You may have your sights set on a car in two years and a child’s college tuition in five. You may use a fixed deposit calculator to generate a general estimate of your monthly income. You may use this data to decide when and how much to contribute to each goal.
Different Options Available
A systematic Investment Plan (SIP) helps with careful investments. Your profits may go down or higher based on the market and other variables you can’t control. Fixed-income assets, such as an SDP, offer safety and security for your money. It ensures a steady flow of funds at a given rate of return. Regular deposits may be useful for saving money, although they offer low returns. The prospects for investment offered by financial companies are solid and provide secured rewards.
Conclusion
A Systematic Deposit Plan (SDP) is the first of its type, a monthly savings initiative. The SDP is a market-first savings product that combines the greatest features of a fixed deposit with those of a systematic investment plan. You may start investing with as little as Rs. 5,000 per month if you utilise this saving strategy. If you want to learn more about multiple options where you can invest your money, you must visit Piramal Finance. They have a range of blogs and articles to help you improve your finance skills. If you need any advice, their experts can guide you.