State Bank of India (SBI), the country’s biggest public sector lender, has a unique offering called the multi-option deposit scheme. This is a specific kind of FD (fixed deposit) or term deposit plan named MODS (Multi Option Deposit Scheme). However, as compared to regular term deposits which can be totally liquidated whenever funds are required, these funds can be withdrawn from MODS accounts in multiples of Rs. 1, 000 based on the customer’s needs.
The balance amount in the account will keep earning interest as per the applicable rates at the time of making the deposit. This plan is tied to the SBI current/savings account and the minimum FD amount is Rs. 10, 000. Deposits exceeding this amount are expected to be in multiples of Rs. 1, 000. There is no maximum amount that can be deposited in this case. The minimum tenor is 1 year and the maximum is 5 years. SBI’s interest rates for MODS accounts are the same as its regular FD interest rates.
The rates are 6.8% and 7.3% respectively for regular borrowers and senior citizens respectively for tenors between 1 year and less than 5 years. Premature withdrawal is possible with MODS accounts. However, regulations pertaining to FD premature withdrawal apply for these accounts too. The nomination provision is also available for these accounts and customers do not have to maintain the monthly average balance in the savings bank account tied to the MODS account. There are loans that can be taken using the MODS account. Tax deducted at source or TDS applies on investments made in the Multi Option Deposit Scheme as per the bank’s guidelines.