Everything you Should Know About Systematic Deposit Calculator
A convenient savings option for potential investors, Systematic Deposit Plan allows individuals to save a small sum every month and generate a significant lump sum amount for their future. Allowing investors to start saving with a sum of money starting at just Rs.5,000, investors can also choose to save a higher amount periodically. While numerous features are offered on these plans, it is also important that investors learn how to calculate their return.
How to use a Systematic Deposit Calculator?
Learning how to calculate the returns on a Systematic Deposit Plan is essential to choose the best SDP to invest in. While online calculators are easily available for investors to use, it is also crucial to learn how to use it. The method of using such a calculator is described below in steps.
- Potential investors should begin by accessing the online calculator provided by financial institutions like Bajaj Finance and others.
- After accessing the official calculator, first, an applicant must choose the type of customer he/she is. The different options are listed below –
- New customer,
- Existing customer,
- Senior citizen, and
- An employee of the concerned financial institution.
- Once the type of customer is selected by an applicant on the online SDP calculator, potential applicants must enter the amount they want to save every month.
Note – It is important that applicants select this sum carefully when opening an account since they cannot change it before the maturity of their systematic investment plan.
- Investors should next select the tenor for which they want to save their money in a Systematic Deposit Plan. While investors must select a minimum of 12 months as their tenor for maturity, they can also opt for a much higher duration too. This tenor duration can extend up to 60 months in total.
- A major advantage of availing the best SDP to invest in is that it allows customers to select the number of deposits they want to opt for. After having put in the total amount of money an investor wants to save every month and the tenor for their investment, he/she must now select their number of deposits.
After all these above details are filled in by an investor, total returns, as well as individual returns on these deposits, are displayed on the screen.
Multiple details which are displayed after the input of all the details on an SDP calculator are listed below –
- Rate of interest offered at that point in time.
- Interest earned on individual deposit amounts.
- Pay-out offered.
- Total pay-out at the completion of the maturity tenor.
- Total amount of interest earned.
Documents required to apply for a Systematic Deposit Plan
Once a potential applicant has checked the return he/she can expect, it is important to check the necessary documents to invest in this plan. While every Indian citizen can save in such a plan, the document requirements for the best SDP to invest in can mildly vary over different financial institutions.
The basic documents which are necessary are listed below –
- KYC documents of the applicant, including address details. Investors can use any of their government-issued voter ID, Aadhaar card, driving licence, passport, etc.
- Address proof like electricity or landline bill.
- Recent passport-sized photograph. Depending on the financial institution, 2 or 3 photographs will be required.
- PAN card of the applicant.
- Financial account details for future deposits.
It is important for investors to note that they also have to submit an account payee cheque to the financial institution where they are opening their systematic deposit account. A crucial step instilled by the different financial institutions offering the best SDP to invest, it ensures that all financial account details are linked to the savings account. In turn, this removes the hassle of depositing every month since these are automatically deducted from the linked account.
Is Systematic Deposit Plan better than other savings options?
It is difficult to pin-point one savings or investment plan that is better than all the rest. Depending on the financial situation as well as income amount, there are many plans which can be the best choice.
The advantages offered are mentioned below –
- The returns on these savings plans are quite high since high rates of interest, beginning at 7.6% per annum, are offered.
- Investors can choose a tenor between 12 and 60 months.
- Beginning at a minimum of Rs.5,000, everyone can save in this plan.
- Investors can choose to withdraw a specific deposit in case of any financial necessity.
- The returns on these plans are assured as per rates of interest decided during the time of application.
The best SDP to invest in have the above advantages, which make it a very lucrative option, especially for new professionals who do not have significant disposable cash at hand. They can begin their savings early on with such plans. In turn, they also develop the proper discipline to handle finances and investments.
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