There is no determined age and time for saving the money. Whenever whoever has the surplus amount should start saving. This is because it is a good practice to save for the rainy day. The amount saved today can be utilized in the times of need. Thus, saving for future is considered as an act of financial prudency. Not only savings but the way you save is of equal importance. This is because the amount you pull out now from your expenditure and store in piggy banks or lockers will be inadequate to meet your future requirements.
Therefore, saving through investment is considered the idle way of planning for future. While a lot of people think that investments involve risk bearing, there are ways of risk free investments too. Most prominent among them is fixed deposits.
It is the safest mode of engaging the idle money. In fixed deposits, the invested amount is locked-in for a determined period of time and yields interest throughout the period of investment. Anyone can invest in the fixed deposit as there are no rigid investment criteria. Moreover, the banking institutes proffer multiple fixed deposits schemes to cater the diverse financial requirement of the people. The depositors can select the scheme that best suits their investment purpose and helps them attain the financial objective.
The fixed deposits schemes offered by various banking institutes are mentioned below:
State Bank of India
The bank has drafted multiple fixed deposit schemes to cater the variant needs of the people. The investor has the flexibility to decide and invest in the scheme that he considers is best for him. The fixed deposits schemes offered by the bank are:
SBI MODS – Multiple Option Deposit Scheme (MODS) is the deposit plan in which the FD account holder has the freedom to withdraw the amount in multiple of ₹ 1,000. The remaining amount in the deposit account yields interest at the same interest rate. The minimum amount required to open the account is ₹ 10,000.
SBI Annuity Deposit – The account under annuity fixed deposit scheme is opened with the minimum amount of ₹ 25,000. There is no maximum limit on the deposit. The deposit can be made for the period 36, 60, 84 or 120 months.
SBI Reinvestment Plan – This deposit can be opened with the minimum amount of ₹ 1,000 for the tenure ranging from 6 months to 10 years. In reinvestment plan, the interest receivable is quarterly compounded and added to the principal amount. Then the interest is calculated on the new principal and is paid at the time of maturity.
SBI Tax Savings Scheme – The customer can avail the benefit of saving taxes on the fixed deposits by investing the minimum amount of ₹ 1,000 for the minimum period of 5 years. However, the maximum investment amount is limited to 1,50,000.
The HDFC bank has proposed two deposit schemes to promote the habit of saving in the people. The schemes are as follows:
Regular Fixed Deposit – The customer can avail the benefit of regular interest on the investment made with the minimum amount of ₹ 5,000. The account can be opened for the period ranging from 7 days to 10 years. The candidates opening the account can easily liquidate the deposit and appoint a nominee. The account holder can also avail the sweep-in & super saver facility on deposits held in a single name.
5 Year Tax Saving Fixed Deposit – Under this scheme, the potential depositor can open an account with the minimum amount of ₹ 100 and in multiples. The maximum investment amount is restricted to ₹ 1,50,000 per financial year. The deposit can not be liquidated before the lock-in period of 5- years which is the maximum tenure.
The ICICI Bank provides the option of investing the money in different fixed deposit schemes. These schemes include the money multiplier scheme and tax saver scheme. Apart from this, the bank has incorporated types of plans that are as follows:
Traditional Plan- Under this plan, the interest is receivable at the monthly and quarterly intervals.The account holder can select the interest payout frequency as per his need. The tenure for this plan lasts from 7 days to 10 years.
Reinvestment Plan– The candidates opting for this plan have to make an investment for the minimum period of 6 months. Unlike the traditional plan, the interest in this scheme is not paid out but is compounded quarterly and reinvested with the principal amount. This compounded interest is rolled out at the time of maturity of the plan.
Certain documents are required at the time of booking a deposit. The list of requisite documents is given below:
ID Proof & Address Proof:
- PAN Card
- Driving Licence
- Voter ID
- Government ID Card
- Senior Citizen ID Card
- ID Card Issued by Post Office
- Bank Statement with Cheque
- Telephone Bill
- Electricity Bill