SBI's fixed deposit scheme lets users withdraw money without penalty

The State Bank of India is offering a unique fixed deposit scheme which allows users to withdraw money from the account whenever they want without attracting a penalty.

SBI’s Multi Option Deposit Scheme (MODS) is a fixed deposit scheme linked to the savings or current account of an individual.

Unlike normal term deposits which are fully liquidated anytime you need funds, you can withdraw from a MODS account in multiples of 1,000 as per your fund need. The balance amount in your MODS account will continue to earn the Term Deposit rates applicable at time of initial deposit.

Here are the features of the SBI Multi Option Deposit Scheme, as per the SBI website.

Who can invest in SBI Multi Option Deposit Scheme?

Individuals residing in India Resident individuals singly or jointly, minor (himself/herself or through his/her guardian), Karta of Hindu Undivided Family or HUF, firm, company, local bodies and any government department can open an SBI MODS account. The tenure for SBI Multi Option Deposit Scheme will be one to five years.

The interest rate of SBI Multi Option Deposit Scheme will be similar to the regular fixed deposit rates offered by the State Bank of India. Senior citizens can earn 0.50 per cent more than the rates of interest applicable to normal people.

How to withdraw from SBI Multi Option Deposit Scheme?

Users can withdraw money from the SBI MODS scheme in multiples of Rs 1,000 via ATM, cheque or bank branch. There is no restriction on the withdrawal limit.

If you partially withdraw money from the SBI Multi Option Deposit Scheme account, interest will continue to be added on whatever amount is remaining.

Customers are required to maintain the average monthly balance of their savings or current account linked to the SBI Multi Option Deposit Scheme.

Users can opt for MODS through auto sweep facility in savings plus accounts. For auto sweep facility, the minimum threshold balance and minimum resultant balance should be Rs 35,000 and Rs 25,000 respectively. The minimum sweep amount is Rs 10,000 and thereafter in multiples of Rs 1,000.

Customers can also avail of the nomination facility for the SBI Multi Option Deposit Scheme. Tax deducted at source (TDS) would be levied as per the prevalent rate applicable for regular FDs.