Bank Fixed Deposit (FD) is considered the safest and most rewarding investment. It also provides guaranteed returns with profits. However, the biggest problem with FD is that if money is needed, it has to be broken, even if the need is a small amount of money. Due to this you get a low interest rate and have to pay a penalty. To overcome this problem, State Bank of India (SBI) has brought a special FD scheme. In SBI Multi Option Deposit Scheme- MODS, you can withdraw as much money as you need without breaking FD.
SBI MODS scheme is like a term deposit, but it is linked to the savings account or current account of the account holder. The advantage of this is that you can withdraw money from it anytime when needed. It has the facility of premature withdrawal. However TDS is applied on this. If the depositor wants to withdraw money from the linked account and does not have that much money in his account, he can withdraw money from the MODS as well. Money can be withdrawn for 1000 rupees or its multiples.
Special features of this scheme
• SBI Multi Option Deposit Scheme has to deposit at least Rs 10,000. After this you can deposit more rupees in multiples of 1000 rupees in it. There is no maximum limit for depositing money in it.
• SBI MOD scheme can also be withdrawn through ATMs. After withdrawing money from the MOD, the fixed interest on the FD will continue on the amount of money left.
• The same interest is available on MODS as on other FDs of SBI.
• Loan facility and nominee facility are available on this scheme. It can be transferred from one branch of SBI to another branch.
• It is mandatory for the custemer who holds the MOD to keep the minimum monthly average balance in the linked savings account. It has to keep a minimum balance of 3000 rupees. When the balance is low, MODS is broken and credited to the account.
• Individual, joint, minor, firm, company, local body can invest in this scheme.
• Like SBI FD, here too, interest will be available at the rate of 2.9% to 5.9%. These rates are effective from 8 January 2021.
• On FD up to 5 lakhs, if you withdraw money before time, then penalty of 0.50% will be levied. This penalty will be 1% on FDs between 5 lakh and 1 crore. No interest is received on deposits less than 7 days.
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