In India, stock market indexes received fatal blows due to events like the presentation of Union Budget 2020, COVID-19 outbreak, and the crude oil price war between Saudi Arabia and Russia. So Talking About Stock Market Crash 2020 in India
On 28th February, NSE Nifty and BSE SENSEX plummeted by 432 points and 1442 points respectively; these indexes fell that entire week continuously marking it as one of the worst since 2008.
Further, on 12th March 2020, BSE Sensex fell by 2919 points (8.18%) while the NSE Nifty dropped by 868 points (8.3%) following the classification of COVID-19 as a pandemic by WHO on 11th March.
However, the worst blow these indexes have suffered to date was on 23rd March after the declaration of a nation-wide lockdown, when Nifty plunged by 1135 points (12.98%), and SENSEX went down by 3934.72 points (13.15%). With the number of confirmed cases growing more alarmingly in India as well as globally, stock marketers and investors alike are staring at one of the worst crises in the history of Indian economy.
This situation has left scores of investors confused about what they should be doing to counter the financial crisis they are suffering or are yet to suffer. Since investing in a market-linked instrument would be incompatible with the current times, individuals can apply for Systematic Deposit Plan to invest.
What is it?
The Systematic Deposit Plan is a fixed deposit feature, akin to SIPs. Wherein a Systematic Investment Plan, an investor can invest periodically in mutual funds, in Systematic Deposit Plans, an individual can make monthly deposits in FDs.
Also, each deposit is recognised as a separate FD. In brief, the Systematic Deposit Plan provides all the benefits of a Systematic Investment Plan without the risk of unanticipated and negative returns.
How can investors expect guaranteed returns?
These uncertain times surrounding the global economy has made market-linked instruments an unfeasible option. Systematic Deposit Plans, on the other hand, are not linked to such market and hence, will not be impacted by the seismic shifts in the global economy.
Therefore, investors can expect the guarantee of moderately high and fixed returns on their deposits from these quick savings tools. Furthermore, Systematic Deposit Plans from Bajaj Finance is accredited as stable by agencies like CRISIL and ICRA.
With the facility of a systematic deposit calculator, individuals can compare different monthly deposit amount, tenor, and the number of deposits to know which combination works best for their monetary objectives.
It is an ideal savings tool at this juncture of the Indian economy, wherein investors can mobilise their savings by choosing the best SDP plan to invest and earn substantial returns.
What are its features
Minimum deposit amount
The minimum deposit amount allowed under a Systematic Deposit Plan is Rs.5,000. This feature makes the option more feasible for individuals from all income categories. For instance, individuals in the initial phases of their careers can choose to invest through this feature conveniently. Through Systematic Deposit Plans, such individuals can develop the habit of saving a portion of their income from an early stage.
Convenient deposit tenors
Under a Systematic Investment Plan, tenor ranges between 12 months to 60 months. Depending on the tenor, the rate of interest on deposits varies – a longer tenor would attract a higher rate of interest and vice versa.
Individuals should duly consider their financial objectives before determining the lock-in period for their deposits. For instance, if someone has to meet any sizable expense in the future, he/she can opt for a longer tenor to earn higher interest.
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The best SDP plan to invest also offers the facility to open multiple accounts with varying tenors. Therefore, individuals split between both long- and short-term financial obligations can opt for that.
Prospective depositors can use a systematic deposit calculator to carry out the necessary calculation to make a well-informed decision.
Investment procedure
Customers need to pay the first deposit through an account payee cheque while the later deposits would be automatically debited from a respective customer’s account every month. He/she will need to submit a NACH mandate for automated payments.
Deposits can be made on three dates – 3rd, 7th, and 12th – of each month. An individual needs to choose on which date he/she will make deposits every month when opening an account.
Premature withdrawal facility
A depositor can choose to withdraw the balance on his/her account prematurely. However, such withdrawal is only possible if a deposit has finished 3 months. Additionally, it would be subject to RBI regulations.
Loan against fixed deposit
As an alternative to closing an account prematurely, the best SDP plan to invest offer loan against fixed deposit. Thence, customers can utilise that option to meet any emergency financial obligation.
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In a nutshell, a Systematic Deposit Plan is ideal during these trying times. It is all the more suitable for individuals in the early stages of employment looking for ways to park funds for