Systematic Deposit Plan is a savings tool that is designed especially for those individuals who wish to mobilise their savings to build a reliable fund. The key features and associated benefits of this savings tool make it an effective way of mobilising savings, even when the income is moderate. However, to make the most of such a scheme, individuals must look for the best SDP to invest. Subsequently, they should find out how they can maximise their earnings through it and plan their finances accordingly.
Reasons why systematic deposit plan is a viable savings tool
The following pointers highlight why a systematic deposit plan is the best savings option for the middle class –
1. Helps to Save with Small Amount
A potent systematic deposit plan can be started with a minimum deposit of Rs.5,000 every month. It enables individuals with a limited income to benefit from this savings tool significantly. Additionally, the fact that the scheme allows individuals to increase their deposit amount helps them to make the most of their hike in monthly income.
2. Facilitates a Habit of Savings
A systematic deposit plan is a savings option that requires account holders to pay a fixed sum of money every month. In turn, it helps them to inculcate a positive attitude towards savings through the course of deposit tenor. Their new outlook towards savings helps them to prioritise the same and manage their expenses more effectively.
3. Generates Higher earnings
When compared with most savings tools, the best SDP to invest generates higher returns. The particular feature comes in handy for many individuals who are on the lookout to increase their purchasing power. By generating a higher earning, they would be able to meet their financial requirements with greater convenience. Additionally, under this scheme, each deposit is considered to be a separate entity and offers a different rate of returns on them. Notably, the interest rate is set as per the current market rates. As a result, the returns generated on each deposit may vary at the time of maturity.
4. Offers Liquidity
Mostly, individuals belonging to the middle-income group do not have a reliable corpus to rely upon during an emergency. However, individuals with a systematic deposit account are entitled to avail a financial respite through their deposits.
They may either decide to withdraw funds from their deposits or avail a loan against them to meet their financial requirements conveniently. Nevertheless, deposit account holders should use reliable SDP calculator to opt for a more cost-effective solution between the two.
5. Softens the Impact of Market-Linked Risks
Unlike most market-linked savings instruments, the systematic deposit plan does not pose a threat to an individual’s accumulated savings. For example, even in a stagnant or falling market, deposit holders are assured steady returns.
Further, such a feature helps them to tackle the impact of the falling market with greater ease and helps them to maintain their purchasing power throughout. Also, the feature comes in handy to build a substantial emergency corpus as there is no underlying risk of losing their savings.
6. Helps to Meet Financial Goals
The best SDP to invest in often comes with a flexible tenor that mostly extends from 1 year to 5 years. or example, Bajaj Finance’s Systematic Deposit Plan comes with a maturity period of 12 months to 60 months. Further, the financial institution allows deposit holders to opt for a maturity period that suits their financial requirements. Also, the extensive maturity period will enable individuals to plan their deposits to meet both their long-term and short-term financial goals accordingly. Subsequently, depositors can use the SDP calculator to pick a convenient number of total deposits.
7. Automated Payment Option
The automated payment option that accompanies this savings tool also comes in handy for individuals with moderate income. To elaborate, individuals with no prior experience of regular savings often run the risk of missing out the payment date.
With the automated payout facility under the NACH mandate, a fixed amount would be directed towards their deposit account on the payment date automatically. In turn, those who opt for this facility gain freedom from tracking their payment date and would also eliminate the risk of forgetting the payment date altogether.
8. Zero Penalty Charges
At a time when there is a financial crisis, individuals may have to skip a payment or two towards their systematic deposit account. In such a situation, the best SDP to invest in does not impose a fine on account holders.
Lastly, it can be said that a quick savings tool that helps to mobilise a small sum of money at regular intervals is the best SDP to invest, most suitable for individual still in the middle income gradient. Plan your finances fruitfully even without a lump sum corpus with the help of such an easy savings scheme.