It is really essential for every earning individual to keep a portion of their monthly income, be it a retirement portfolio or future financial obligations. In order to address such situations conveniently, everyone has to save some money for themselves. It will help not only in building substantial amounts over time, however it also inculcates the habit of disciplined savings as an individual.
A systematic investment plan is offered in the Indian financial market with several options to facilitate the same. But, since this is related to the market-dependent instrument, the risk associated with it is much higher. And losing out on accumulated amounts will be also higher. Thus, to maximize the profit gained in a safer environment, it is always best to raise your monthly savings by investing in a Fixed Deposit.
Why Fixed Deposit?
Fixed deposits are one of the most popular saving tools for individuals of all walks of life. Especially, amid the high market value and the present economic downturn, investing in fixed deposits help you to protect your hard earned money and multiply it more.
These deposits enable you to plan your investments according to the goals, so that you can multiply your savings with high safety and flexible tenure plans. The choice is given to you to fix the deposit tenure and also the frequency of the interest you will receive in return which will be paid out to you at the end of the tenure. In addition, you can use the fixed deposit calculator to find out the returns you will get in that current plan in which you’re opting for. It will thus help you to calculate the maturity amount in the fixed deposit, before starting to invest your money in it.
Therefore, the fixed deposit is suitable for all investors, regardless of any risks to their money. But, since the deposit needs a lump sum of amount, investors who are willing to open the account have to accumulate the money by saving it regularly until it reaches a solid figure. Financial institutions have their own eligibility criteria for investors based on the money they want to invest in. And it may not be suitable for individuals who have started their job roles as they may not have the essential amount of money to open a fixed deposit account and to meet a sizable monetary obligation, it will take longer time compared to other individuals who are continuously for years.
Hence, systematic plans are designed by the financial institutions like ShriramCity Finance to meet the fixed deposit requirements for those kinds of customers. It is designed as a quick savings tool in which an individual can pay the monthly deposits into an account of the fixed deposits. These deposits are considered, calculated individually and earned at the rate of interest prevailing on that date. At the same time, each deposit will mature individually like the other kind of deposits.
Investors who are willing to accumulate their savings through the systematic plans can make use of the calculators available in the company’s website as well. Individuals can use this tool to assess the interest rates before depositing their money and it will also aid them to deposit with a perfect strategy as per their financial situation.
How to systemize your Fixed Deposit plans
Let us discuss some points that can differentiate the systematic plans form the other fixed deposit schemes or saving tools offered monthly in the Indian Financial market:
Low Deposit Amount
Any individual is eligible to start their own Systematic Deposit plans starting from a minimum amount of Rs.5000, it is the common amount fix by the financiers. Nevertheless, it also reduces the burden of saving a lump sum amount of money and it thus gives the pleasure of creating the wealth over time required to invest in a fixed deposit.
Ranging from 6 to 48 months for a tenor and from 12 months – 60 months, the monthly deposits for an individual has a large number of varieties in which they can avail the benefit of flexibility in the systematic plans. They can also choose the number of deposits depending on their short or long-term financial obligations.
The interest for each deposit earned is based on the prevalent rate on the respective date. However, unlike in a systematic investment plan, interest rates of each deposit accrues will remain constant throughout the maturity period. The rate of interest in return fluctuates with regards to the market conditions and therefore, it will not pose any uncertainty of earning for the respective investor.
Ease of Depositing
Systematic Deposit Plan can be made through an account payee cheque, on the first payments. And from there, the subsequent payments will be automatically debited by the concerned financial institution from the account of the depositor. Thus, investors will not need to assume the struggle of payments on a periodic basis. At the same time, the investors can enjoy the convenience created by the systematized wealth accumulation and thus lead a stress-free life.
Depositors who are also the account holders have the liberty to choose and withdraw their accumulated amount at the premature time as well. And those withdrawals are subjected to the regulations of the Reserve Bank of India (RBI).
An investor only needs to submit his/her KYC documents in order to open an FD account through Systematic Deposit Plan. The documents should be submitted alongside the cheque for the first payment with a NACH mandate.
Loan Against Fixed Deposit
Depositors can also opt for a loan against their saved fixed deposit money if they are in need of any immediate financial obligation, as an alternative to premature withdrawal. This benefit allows the individuals to make sure that their Fixed deposit account will continue to remain by earning the interest amounts. Therefore, the Systematic Deposit Plan stands as a challenging option for investors, who want to save a lump sum amount for their future without straining too much by observing their current financial status.
While comparing a systematic investment plan with the other plans, it is clearly evident that there is a guaranteed assured return even if there is a market crash.