State Bank of India or SBI offers the option of opening Multi Option Deposit Scheme (MODS) – a type of fixed deposit (FD) linked to the savings or current account.
Unlike normal FDs which are fully liquidated anytime an investor needs funds; one can withdraw from a MODS account in multiples of 1,000 as per the fund need.
State Bank of India or SBI offers the option of opening the Multi Option Deposit Scheme (MODS)—a type of fixed deposit (FD) linked to the savings or current account. Unlike normal FDs which are fully liquidated anytime, an investor needs funds; one can withdraw from a MODS account in multiples of 1,000 as per the fund need.
Here are key things to know about SBI’s Multi Option Deposit Scheme:
Eligibility
Resident individuals singly or jointly, minor (himself/herself or through his/her guardian), Karta of HUF, firm, company, local bodies and any government department can open the SBI MODS account.
Investors can create a MODS account through OnlineSBI or by visiting the nearest branch.
Investment limits
The minimum term or fixed deposit amount needed for MOD creation is Rs 10,000. Any deposits above this amount are required to be in multiples of Rs 1,000. There is no limit for a maximum term deposit amount for MOD creation, according to SBI.
Tenure
For SBI’s multi-option deposit account, the minimum tenure is one year and the maximum tenure is five years.
Interest rates
The balance amount in the MODS account continues to earn the FD rates applicable at the time of the initial deposit. Currently, SBI pays interest rates in the range of 5.10 percent to 5.40 percent on FDs of 1 year to 5 years.
Taxation
Tax can be deducted at source if the interest earned on the deposit is more than Rs 10,000 during the financial year.
Nomination
Nomination facility is available with the SBI MODS account. In the case of auto-sweep MODs, the nomination in the account from where the fund is transferred is retained. However, if a customer wants to change nomination in any of the accounts, he may do so by filing Form DA-I.
Premature withdrawal
For FDs up to Rs 5 lakh, the penalty for premature withdrawal is 0.50 percent (all tenors). For FDs above Rs 5 lakh but below Rs 1 crore, the applicable penalty is 1 percent (all tenors).
When there is a break of MOD, the interest is paid with a penalty at the applicable rate for the period the broken amount has run and the remaining amount continues to earn the original rate of interest.
No interest is paid on deposits that remain for a period of less than 7 days.
Source: sea.operanewsapp.com
