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SBI Unfixed Deposit Scheme : A Way To Earn Higher Interest Without loosing Liquidity

Whenever we plan to deposit our surplus money in the bank account, we either go for saving account or fixed deposit. Depositing money in saving bank account ensures safety, liquidity & some interest income whereas fixed deposit account offers better interest rates than saving account with safety but restricts liquidity. As in case of fixed deposit, depositor have to place money with bank for a fixed period of time say for 3 months, 6 months etc.. Withdrawal of money before maturity attracts penalty. But if you want to earn higher interest than your saving bank account but need liquidity & safety at the same time then what will you do?

So here we are present with a all in one solution which will offer you the combine benefit of both saving & fixed deposit account. Unfixed Deposit, it is a new and less known facility launched by SBI in India. Unfixed Deposit is basically a fixed deposit with the provision that the customer can withdraw the amount deposited in part or in full, in times of need.

unfixed deposit

Lets imagine a situation where a customer comes to a bank to deposit Rs.15 lakhs. But the customer asks the manager where to deposit this money as I may need this money either in parts or as a lump sum at once or in more times. But as of now I have no idea as when and how much I would withdraw.

Manager : He asked the customer to keep the amount in saving bank account, as you will earn interest of 4% on your amount deposit and will be able to withdraw any amount without loosing any interest and without any penalty. Whereas with the induction of unfixed deposit, manager would offer customer to keep this amount in unfixed deposit and withdraw any amount anytime and earn interest @9% on the amount deposited.

Features Of SBI Unfixed Deposits

  • Unfixed deposit offers the combine benefit of both saving and fixed deposit account, it combines the liquidity feature of saving account and higher interest rate of fixed deposit account.
  • Unfixed deposits are available for short term ranging from 7 days to 6 months.
  • Interest income accrued from unfixed deposit is taxed like Fixed Deposit interest income.
  • Unfixed deposit works like fixed deposit where the interest rate is specified at the time of making unfixed deposit. However, there is no penalty on withdrawal of money even during the tenure of the deposit. This allows investor to withdraw funds in between the term without loosing interest income.
  • Bank fix a minimum period for unfixed deposits which demands funds to be parked for atleast that period of time. Any withdrawal before minimum period will take away the interest income on the deposit.
  • The interest income will be calculated on prorate basis, which means if the money deposited under unfixed deposit is withdrawn before maturity then interest will be paid on the basis on number of days investor remain invested. In case of partial withdrawal is made, the balance amount continues to earn interest at the specifies interest rate.
  • The interest rate on unfixed deposits varies depending on the amount of deposit. For deposit above Rs 1 Crore for a period of 7 days to 180 days, the interest rates is around 9% whereas for deposit amount below 1Crore i.e between Rs 15 lakh to 1 crore for a period of 7 days to 179 days, the interest rate is around 7.25%.
  • Interest rate of unfixed deposit are quite competitive, as interest rate of liquid mutual funds is between 9% to 9.5% whereas certificate of deposit is offering 10% to 11%.

The Unfixed Deposit offers you the opportunity to withdraw your money any time without prior notice and without losing any interest. The Unfixed Deposit let you enjoy higher returns and liquidity as well. Then why to keep our hard earned money in savings bank account which offers only 4% interest (only a few banks offer 5.5% – 6% interest) and Fixed deposit which reduces your interest income in case of premature withdrawal.

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