The Systematic Deposit Plan is designed especially for those individuals who intend on developing a regular savings habit. Individuals can put away a small portion of their money regularly to earn income on it.
This aspect of the top SDP to invest in makes it a feasible way of growing one’s pocket money. Also, the associated features of the scheme make it a convenient savings tool.
Features of a Systematic Deposit Plan
The following are among the major features and the associated benefits of a Systematic Deposit Plan –
1.Monthly savings tool
Systematic Deposit Plan is a monthly savings tool that can be started with a minimum deposit value of Rs.5,000. Such a unique feature allows young individuals to partake in the practice of regular savings. It not only helps them to develop such a habit but also facilitates a disciplined approach towards financial management from an early age.
2. Minimum documentation
The savings plan can be opened by submitting a few basic documents. For, example Bajaj Finance’s Systematic Deposit Plan account can be opened by submitting KYC document, NACH mandate and an account-payee cheque.
3. High liquidity
The deposit scheme comes with high liquidity and allows individuals to withdraw their deposits in case of any emergency.
They can also meet their immediate financial requirements by availing short-term assistance in the form of a loan against deposits or through premature deposit withdrawal. However, individuals can do so by following the norms set by RBI and their respective institution.
4. Ease of payment
The top SDP to invest in offers the automated facility of payment to the depositors. The payments are routed each month via NACH. To create an account, depositors are required to forward their first deposit by cheque to have their respective accounts registered with the financial institution. This feature offers account holders the freedom from depositing manually and hence eliminates the risk of forgetting the payment date.
5. Zero bounce charge
Deposit holders do not have to pay any penalty on missing out any scheduled deposit payment. This protects account holders from incurring any additional financial liability. It proves to be a useful feature when young depositors are short of cash and cannot pay in a particular month.
6. Flexible maturity periods
The savings tool comes with a flexible tenor ranging between 12 and 60 months. This offers deposit holders an opportunity to tailor their deposit plan as per their financial goals.
For instance, if they intend to save for a smartphone or a laptop, they can opt for a tenor of 2 years and save the required funds easily.
7. Joint account facility
Also, the savings tool comes with the facility to create an account jointly. Individuals can open a joint account with their family member and benefit from their combined savings. It would not only help them save more but would also keep their deposits active even when they are short on cash.
Systematic Deposit Plan vs other savings tools
The top SDP to invest in is better than most other savings tool in the following ways –
A. Higher returns than a savings account
When compared to traditional savings options like a regular savings account, the Systematic Deposit Plan generates higher returns. It allows young individuals to meet their respective financial goals quickly with a little planning.
Individuals can use a reliable systematic deposit calculator to compute how their deposits will generate returns through the tenor.
B. Small deposit value
A Systematic Deposit Plan can be opened with a small deposit value. It allows individuals to save a portion of their monthly allowance without straining their resources. Hence, youngsters can witness steady growth in their savings and make the most of their pocket allowance to fulfil their financial requirements easily.
C. Safe and secure savings tool
Since a Systematic Deposit Plan is not market-linked, there is no such risk aspect associated with it. This way, one can protect their accumulated savings from depreciating. Eventually, it will allow individuals to build a substantial fund even by saving a small portion of their pocket money each month.
Benefits of a Systematic Deposit Plan
The following offers an overview of the benefits of a Systematic Deposit Plan –
- Allows mobilising small portion of available cash at hand each month.
- Helps to build a reliable corpus to meet financial goals.
- Fosters a positive approach towards savings from an early age.
- Helps to prioritise savings.
- Generates earnings and helps to increase purchasing power.
- Encourages financial savings and financial management.
Hence, deposit holders can grow their pocket money by making the most of the features extended by the top SDP to invest in. Eventually, it would also help them to develop a smart approach towards financial planning and management.
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at Highlight Story