State Bank of India has introduced an excellent scheme for its customers called the Multi Option Deposit Scheme (MODS). This scheme is a superior investment option compared to a Fixed Deposit. Let’s explore this scheme further.
Many individuals invest in Fixed Deposits (FDs) to secure a stable income through interest. To attract investors, numerous banks offer high interest rates on FDs. However, the State Bank of India, a public sector bank, provides various investment options alongside its lucrative FDs.
SBI has launched another impressive scheme, the Multi Option Deposit (MOD). This scheme allows customers to create Fixed Deposits linked to their Savings or Current Accounts.
This setup will enable them to withdraw the necessary amount from these deposits in case of emergencies while still earning interest on the remaining deposit.
One key advantage of SBI MODS is that it offers Fixed Deposit interest. Additionally, investors can withdraw funds in advance without incurring any penalties.
As the scheme is linked to your savings or current account, withdrawals from this scheme can be made through an ATM or by cheque, just like withdrawals from a savings account.
The main difference between a Fixed Deposit and the MOD Scheme is that if you withdraw from an FD before its tenure ends, you receive the entire amount but incur a penalty. With MODS, you can withdraw money as needed, and the bank continues to pay interest on the remaining balance.
SBI MODS, deposits must be made in multiples of Rs 1,000, and withdrawals can be made in the same increments. You can make withdrawals as frequently as you wish.
The SBI MODS scheme offers numerous benefits. Funds can be invested for 1 to 5 years, with interest rates varying based on the investment period. Senior citizens receive additional interest, and a nominee facility is available.
The MODS account can be transferred to a different branch; however, a minimum balance must be maintained in the savings account associated with the MODS scheme. Please note that tax applies to the interest earned on this investment.