Recurring deposit with guaranteed return but with a difference! Check how it works

By: |
August 5, 2020 5:45 PM

The interest rate on the date of opening the RD account is applicable on the deposits made till maturity.

 Recurring deposit, guaranteed return, opening RD account, depositors, interest rate, Systematic Deposit PlanThe Single Maturity Scheme allows the depositors to receive maturity benefits of the plan on a single day.

Recurring deposit accounts have several benefits for the depositor. The primary advantage of a recurring deposit (RD) is that it helps in building a habit of saving. In RD, the interest rate is fixed till the maturity of the deposit. One needs to fix a period for the deposits and the amount of deposit. For example, one may open the RD account by saving Rs 5000 each month for 5 years. The interest rate on the date of opening the account is applicable on the deposits made till maturity. Bajaj Finance has introduced a new Single Maturity Scheme variant under the Systematic Deposit Plan (SDP), which works differently from a traditional RD scheme.

The Single Maturity Scheme allows the depositors to receive maturity benefits of the plan on a single day, for the investment corpus built over time with Systematic Deposit Plan (SDP). Although, it is similar to a traditional RD, here is how it differs from it – The depositors in the Single Maturity Scheme benefit from placing each deposit at interest rates prevailing on the date of each deposit, over the complete tenure.

Once the first deposit is booked for a specific tenure, the tenure for every subsequent deposit will be regulated to mature on the same date. For this scheme, depositors need not wait to accumulate a corpus to investment in a fixed deposit as they can save easily on a monthly basis and get returns on a single day.

Depositors can start building their corpus with monthly deposits starting at Rs 5,000 per month. Depositors using the scheme, can choose tenures ranging from 12 to 60 months and raise a lumpsum amount with contributions every month.

Bajaj Finance Limited offers fixed deposit in Systematic Deposit Plan (SDP), – a monthly investment option that enables the customer to invest in small monthly deposits. The maturity period of each monthly deposit under SDP shall be for a minimum period of 12 months to a maximum period of 60 months. The depositor will have the option to choose between 6 to 48 numbers of monthly deposits under SDP. Under Systematic Deposit Plan, you can choose to save through any of the two variants – Monthly Maturity Scheme and Single Maturity Scheme.

Benefits

As a variant of Systematic Deposit Plan, the Single Maturity Scheme comes with guaranteed returns on monthly deposits along with the convenience and benefits of a Systematic Investment Plan (SIP), without the risk of negative returns.

Like the previously launched Monthly Maturity Scheme variant of Systematic Deposit Plan, this scheme comes with no bounce charges as no penalty will be levied even if a depositor misses the monthly deposit.

The first payment is to be made via cheque or online payment, while subsequent deposits are debited directly from an investor’s bank account through a NACH mandate. Once the first deposit is booked for a specific tenure, the tenure for every subsequent deposit will be regulated to mature on the same date.

As an investor

Even though, the deposits earn you a guaranteed return and help in saving for future goals, remember that the interest earned is taxable in the hands of the investor in the year of receipt.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Principal Asset Management’s Principal Large Cap Fund NFO open till October 12; check features
2Debt Funds Freeze: AMFI seeks SEBI refuge after FIR is filed against Franklin Templeton
3Small Savings Schemes: PPF interest rate remains at 7.1%; No change in rates for Oct-Dec 2020 quarter