sdp investment

What is SDP? How to Choose Best SDP Plans for Maximum Returns?


Last Updated on 13/09/2020 by Deepak Singla

A significant number of investors across India look for low-risk investment options. The socio-economic structure of the country, where more than 40 million nationals are categorized as middle-class depending on their annual income, emphasizes more on assured returns than on risky, yet high-yield investment policies.

To cater to this unique market, financial institutions in India have introduced several different types of savings options. Plans like Fixed Deposits offer an investor the option to save their funds according to their unique financial requirements, and with the introduction of a quick savings tool like the Systematic Deposit Plan, one can benefit from the convenience of SIPs without the risk of depending on the market-linked returns.

What is an SDP?

SDP full Form is Systematic Deposit Plan. It allows an individual to build a corpus with small monthly deposits. Each deposit is treated as a separate FD, accruing interest at the prevailing rate for that particular date of payment made. Unlike a Fixed Deposit, where an investor has to pay a particular sum to open an account, Systematic Deposit Plans allow wealth accumulation without straining one’s personal finances.

How to Choose the Best SDP plans?

There are several factors that one should consider while choosing the best Systematic Deposit Plan. Here are some of the most essential aspects one should check while selecting a particular quick savings tool.

Return on investment

One of the most essential aspects one should check while going through the best SDP plans is the return on deposits. It is the assured sum that a financial institution will disburse after the investment period.

As a feature of the Fixed Deposit, Systematic Deposit Plans offer some of the highest assured returns amongst savings instruments available in the market. Prospective customers can use an SDP calculator to find out the applicable rate of interest before making the investment.

Reputed financial institutions also offer an additional rate of interest (over and above the ordinary rate) for senior citizens and existing customers.


Another essential aspect that everyone should check while selecting the best SDP plans is safety and credibility.  A prospective customer should always check the rating of their preferred financial institution before making an investment.

Deposit and withdrawal facility

It is important to consider the minimum deposit amount, method of payment, withdrawal facility before selecting a particular Systematic Deposit Plan. For example, you can allow a customer to deposit as low as Rs.5,000. Such a minimal amount makes it ideal for everyone, especially first-time investors. It is understandable that such individuals just starting off their professional careers may not have a lump sum corpus available for investment in a regular FD.

Moreover, best SDP plans allow customers to make payments on their preferred date; Systematic Deposit Plans allow an individual to make monthly deposits on the 3rd, 7th, or 12th of each month. Customers can select any of the preferred dates and make the remaining payments on that date every month.

Payments are automatically transacted via the NACH facility, eliminating the hassle of manually depositing the sum every month. Only the first payment has to be made using a payee cheque, and after authenticating the depositor’s bank with the necessary NACH mandate, consequent month’s deposits are transacted automatically.

Account Holders can withdraw one or more deposits after a minimum of 3 months later of making the payment. Individuals who do not want to liquidate their investment can also opt to avail of a loan against their deposited amount. The deposit will continue to earn interest and the total sum will be disbursed if the customer repays the credit within the due date.

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Provision for joint accounts

Some of the best SDP plans offer the provision to open joint deposit accounts which can be beneficial for customers who want to create a savings plan with one or more family members. These usually follow similar guidelines of regular fixed deposit joint accounts.

Fees and charges

Customers should carefully consider the fees and charges associated while choosing a Systematic Deposit Plan. However, an account holder might have to pay a fee (as per NACH) mandate if they fail to pay their monthly deposit. This will be credited from the financial institution holding one’s depositor account.

The long list of features and benefits make a Systematic Deposit Plan an ideal mode of investment, especially for individuals who do not want to commit a large sum at one go. Following the above-mentioned tips will help prospective customers choose the best SDP plans and benefit from the highest return at the end of their investment tenor.