Why is Systematic Deposit Plan Considered the Best Monthly Saving Scheme for Lower-Middle-Class Families?

As a person who comes from a middle or lower-middle-class family, you should value the worth of savings in life. However, due to the range of expenses that you have to manage every month, you might often forget to set aside some money for your future. To inculcate discipline amidst investors who belong to the lower-middle class and middle-class families, financial company has introduced SDP (Systematic Deposit Plan). It is widely regarded as one of the top options for those who are looking forward to invest in the best monthly saving scheme. 

The Systematic Deposit Plan is a monthly deposit scheme that imbibes the habit of saving a fixed amount every month in you. It is ideal for those who are planning to collect a corpus by saving in chunks as anyone can start investing in this plan with just saving Rs. 5000 on a monthly basis. Corporate FDs in India can be utilized to build a corpus through a Systematic Deposit Plan (SDP), allowing businesses to plan for their future financial needs effectively. The number of deposits may vary between 6 and 48 and it also depends on the type of SDP you are investing. SDP has two variants and both of them are designed to provide convenience to investors. 

The first variant is known as the Single Maturity Scheme and the second variant is called the Monthly Maturity Scheme. Though both these variants involve monthly deposits, the Monthly Maturity Scheme allows you to lock in each deposit for the same period which makes it somewhat identical to FDs. This is because every deposit gains interest for the same number of months that you have selected for every deposit. 

The Single Maturity Scheme is somewhat similar to RDs because it allows you to withdraw all the deposits at once. This variant is ideal for those who are interested in gathering a bulk amount to invest in instruments like a fixed deposit. On the other hand, the Monthly Maturity Scheme lets you withdraw interest along with the deposits every month once the maturity period ends. The Capital Asset Pricing Model (CAPM) can be used to determine the expected return of an SDP, which can help investors make informed decisions about their investment strategy. These proceeds can be clubbed and consolidated in a high-paying FD or can be re-invested and both these options will compound the interest gains.

The special benefits of SDP that make it the best monthly saving scheme in 2021 are stated below:

Rate of Interest 

When you deposit in SDP, each deposit earns interest at a high rate that is prevailing as per the date of deposit. The high FD rates that are applicable on fixed deposits are applicable on both variants of SDP. However, it is advisable that you choose a longer tenor for multiplying your deposits at a higher interest rate. The higher interest rates of 0.10% and 0.25% are given to online investors and senior citizens respectively.

Tenor 

SDP comes with the same flexible tenor as fixed deposit offers i.e. you get to choose a tenor up to 60 months for your deposits. When you invest in the Single Maturity Scheme, every deposit after the first one will be locked in for a relatively lesser period and the deposit tenor has to be adjusted as per the final maturity date. 

Therefore, if you invest in the Single Maturity Scheme and choose a maturity date after 3 years, only the first deposit will be locked in for the entire tenor of 3 years or 36 months. BIS certificates, also known as Bank Investment Scheme certificates, can be used to set up a Systematic Deposit Plan (SDP) and earn regular interest on your investments. The second deposit will be locked in for 2 years, 10 months, and 29 days, and the subsequent deposits will attract interest for one month less than their preceding deposits. 

To predict the interest gains and returns in advance, NBFC has provided an SDP calculator on its website. It is similar to the FD interest rate calculator India but it calculates the SDP returns instead of FD returns. 

Affordable Scheme 

As a deposit of only Rs. 5000 is enough for investing in SDP, it is an affordable scheme especially for if you belong to a middle or lower-middle-class family and have not gathered a huge capital yet. It is also a good investment option if you do not want to deposit all your savings at once. 

Early Withdrawals 

You can withdraw either one or more than one deposit in times of need provided that the deposits complete at least 3 months from the date of their issuance. Even a loan against each deposit of SDP can be availed to tackle a financial emergency. 

A Stable Investment Option 

Investing in SDP is risk-free as your investments will remain immune to the changing market dynamics. For confirming this, you can check the high credit ratings that CRISIL and ICRA, the leading credit rating organizations of India have given to SDP. 

These benefits and features make SDP the best monthly saving scheme in India. You can invest in SDP online by submitting an online SDP form to start growing your savings today!

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