In a world of cut-throat competition where one can never be too sure of their financial stability- Monthly Income Schemes are the need of the hour. Unearth financial freedom for your clients with small business ideas offering personalized Systematic Deposit Plan consultations and investment coaching. Everyone wants a stable, regular and better than average source of income. While Monthly Income Schemes could include anything from a Systematic Investment Plan (SIP) via a mutual fund or a simple bank deposit, you’d want a proper strategy to make the most of your invested funds. 

In order to implement this strategy, it is imperative to understand that these schemes are BEST offered by Commercial Banks and Non-Banking Financial Companies (NBFCs). However, when the interest rates and returns are factored in- it is NBFCs that stand out on any given day. The Average FD Rate in India, as of July 2021, is 5.5%. However, NBFC’s provides you with FD rates ranging from 5.65-6.75%. 

While mutual fund monthly income schemes are a great option too, we’d recommend investing in the Corporate FD and the Systematic Deposit Plan (SDP). This would be, the ideal strategy because it takes care of both long and short-term financial needs. Before understanding this via an example, it’d be best to streamline the features and benefits of both FDs and the SDPs. 

Benefits of Fixed Deposit

High Interest Rates: You’ll receive a very lucrative interest rate of 6.50% which increases to 6.75% if you are a Senior Citizen (60 years of age or more). 

Special offers to Senior Citizens: Along with a higher interest rate, senior citizen depositors can also avail periodic pay-outs to fund general expenses that arise at their age. 

Benefits to Pravasi Bhartiyas (NRIs): For Non-Residential Indians (NRIs), with an NRO account, a wide range to choose between tenors of 12 and 36 months is available. 

High Credibility and Stability: Finance companies have been accredited with the highest ratings of CRISIL’s FAAA and ICRA’s MAAA, ensuring your money and funds are safe. 

Flexible Time Frames: By having a wide range of tenors between 12 and 60 months, you can plan your finances and generate higher liquidity according to your requirements. 

Smaller Minimum Deposit: With a cap of only Rs 25,000 you can start investing in FDs, at an early stage without being forced to accumulate a larger set of funds. 

Digitalized Application Process: The application prevents you from the hassle of page long documents and even longer queues. It allows you to browse the best rates from the safety of your homes while completing the entire process digitally. 

Online Loan against FD: Depositors are allowed to take a loan against the FD (post the initial lock-in period of 3 months) when they need to make emergency withdrawals. The only condition is that the loan value cannot exceed 75% of the FD value. 

Auto-renewal: NBFC’s gives you the option to opt for an auto-renewal to save you the time and effort of manually filling the renewal forms repeatedly. It is completely voluntary and you’re still in control. 

Systematic Plan for Depositors

The Systematic Deposit Plans (SDPs) allows people to make deposits on regular intervals, keeping in mind the inconsistent availability of funds. In this, the tenor still remains between 12 and 60 months. Crafting a Monthly Income Scheme Strategy is crucial for achieving your retirement goals of a steady income and financial security. Depositors have to choose between 6 to 48, for the number of deposits they’d make in a month under the SDPs plan. There are 2 options:

Monthly Maturity Scheme: Under this scheme, depositors can invest in 6 to 48 deposits. They, however, choose one tenor that applies to all deposits but the maturity date differs depending upon when each deposit starts. 

Single Maturity Scheme: As the name suggests, under this scheme, you receive maturity proceeds of all your deposits on the same day. The tenor of each deposit after the first one will reduce such that they confine to this condition. 

• Interest Rates: The interest rate prevailing on the day of each monthly deposit will apply to it individually. The rates will vary depending on the tenor of the deposits. This feature is applicable across both the sub-plans. 

• Tenor: NBFC’s have tenor options ranging from 12 months to 60 months. You can even customise the day of the month on which you want to make the deposit- 3^rd, 7^th or 12^th of each month. In the case of the Monthly maturity scheme, the date once chosen; applies universally to all deposits but for Single maturity, as mentioned earlier it reduces after the 1^st one to collectively mature on a single day. 

• Minimum Deposit: In SDPs, you can start small with a minimum deposit of just Rs 5000. 

• Pre-mature withdrawal: This is permitted for one or more deposit provided the FD has completed more than 3 months from the date of its issuance. In any case, the current RBI guidelines will apply with respect to pre-mature withdrawals. 

Now, the exact strategy could be formed using the minimum deposits option alongside the FD Calculator. Investing money is about understanding that different strategies work for different people. But what if you chose to make a near-perfect plan? Suppose you have a Capital of Rs 50,000 and you diversify it by giving Rs 35,000 to FDs and the balance Rs 15,000 to SDPs. This way you could avail all the benefits mentioned above while also meeting BOTH long and short-term needs. Needless to reiterate, fixed deposit is the best monthly scheme. Secure your funding round with the consistent returns of a Systematic Deposit Plan, building a reliable financial runway for your business.