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What are the different Deposit types?

# Little Savings

Deposits are one of the most important and low risk tool for investments. The emerging of deposits is vast due to its compound interest. I personally suggest, SBI is one of the best bank to offer different fixed types. Firstly, lets have a glance on different types of deposits available in India.
  • Fixed Deposit - which provides investors a higher rate of interest than a regular savings account, until the given maturity date.
  • Recurring Deposit - Recurring Deposit is a special kind of Term Deposit offered by banks in India which help people with regular incomes to deposit a fixed amount every month into their. Recurring Deposit account and earn interest at the rate applicable to Fixed Deposits. It is similar to making FDs of a certain amount in monthly installments, for example ₹ 1000 every month. This deposit matures on a specific date in the future along with all the deposits made every month. Thus, Recurring Deposit schemes allow customers with an opportunity to build up their savings through regular monthly deposits of fixed sum over a fixed period of time. Minimum Period of RD is 6 months and maximum is 10 years.
  • Annuity Deposit - Under this scheme, a lump sum amount is deposited by a customer which is repaid to the customer over a period in equated monthly installment which comprises part of principle amount and interest on the reducing principle amount as well. Using the scheme customer can have fixed monthly amount against his one time deposit. Payment will start on anniversary date of the month. If date is non-existent (29th, 30th and 31st), it will be paid on 1st day of next month.
  • Auto Sweep Deposits - Auto Sweep is a facility which interlinks saving bank account with a Fixed Deposit account. In Auto Sweep account, amount in the bank above a limit is automatically transferred to Fixed deposits and earns a higher rate of interest.
  • Flexi Deposits - Unlike Recurring Deposit account, SBI Flexi Deposit offers flexibility in choosing the deposit amount within the minimum and maximum limits per financial year.
  • Multi Option Deposits - The MOD (Multi Option Deposit) account is a combination of your transactional (debit) account and deposit account. These are the Time Deposits but at the time of need for funds, withdrawals can be made in units of Rs.1,000/- from the deposits by issuing a cheque from Savings Bank Account or from ATM / branch or through any other channel. This kind of deposits is completely liquid. The sum of available balance in the transactional account and MOD balance can be used for issuing cheques or withdrawal or making any other payment.
In the coming posts, I'll explain, which is the best deposit plan.

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