Have you ever wondered what you can do if you want to open a fixed deposit account but I don’t have access to a large sum. Is it possible to accumulate the deposit money in installments?
Good, Bank of Baroda offers systematic deposit plan (SDP) for those depositors who wish to start an FD (fixed deposit) but do not wish to invest in a lump sum.
It works along the lines of recurring deposit (RD) Account in which you make a monthly deposit and earn a higher interest rate. At the maturity of your deposit, you will receive your principal along with the interest earned.
It is a simple monthly savings plan that helps depositors regulate their savings to earn higher returns, explains the Bank of Baroda on its official website.
Bank of Baroda Systematic Deposit Scheme: Key Features
TO. Fees: Unlike a typical fixed-term deposit plan, there is no need to make a one-time deposit. The deposit can be made in installments.
B. Flexible holdingsYou can make a deposit for any period ranging from six to 120 months, that is, between half a year and 10 years. The term can be 6, 9, 12, 15, 18, 21, 24…120 months.
DO. Highest interest rate:Interest rates fluctuate constantly and vary depending on the term. Interest is compounded quarterly and is paid at maturity along with the principal amount.
D. Overdraft facility:Depositors can take advantage overdraft (or loan) facility of up to 95 percent of the deposit amount.
Who can open an SDP?
Any person, individually or collectively, can open a systematic deposit plan. Individuals may include minors, farmers, employees, entrepreneurs, self-employed professionals, traders, housewives.
Clubs, associations, educational institutions, companies and public limited companies are also entitled to open a SDP.
What is the minimum installment amount?
The minimum amount required to open an account is ₹50 in rural and semi-urban areas, or ₹100 in urban and metropolitan cities.
The amount of the installment set by the depositor at the time of opening the account must be paid in monthly installments. However, the installment amount must meet the minimum deposit amount criteria mentioned above.
Will the bank deduct the tax withheld at source (TDS)?
Payment of interest is subject to tax deducted at source (TDS) as per the current Income Tax (IT) Act. However, the tax is deducted when the annual interest income is more than ₹40,000.
Is there a penalty for late payment of a fee?
The monthly installment shall be paid during the month. In case of late payment of any installment, the bank is authorized to impose a penalty of Rs 1 for each late payment. ₹100 per month in all periods.
Is there any penalty for early SDP closure?
In case of premature closure From the deposit, the bank will deduct a 1 percent penalty before disbursing the sum.
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