The State Bank of India (SBI) has been a trusted name in banking and financial services. Over the years, SBI has built and maintained a huge customer base in India. It has adapted well to the new digital world by allowing internet banking facilities. Its commitment to innovation and customer-centric solutions is evident through its array of products, which are easy to access and avail. The SBI Multi Option Deposit Account, commonly known as SBI MOD, is a product drafted to make finances easier and more convenient. This unique financial instrument provides customers with a flexible and rewarding way to grow their savings while maintaining liquidity.
This article explores the different features and benefits of SBI MOD while giving you a comprehensive understanding of the same.
Understanding SBI Multi Option Deposit (MOD)
SBI MOD is similar to a fixed deposit account that offers a balance between high returns and liquidity. Unlike traditional fixed deposits, where the entire sum is locked in for a fixed tenure, SBI Multi Option Deposit allows account holders to park surplus funds while retaining the ability to access them with ease. It is associated with a savings account. So, if the depositor issues a cheque for an amount not available in the savings account, the balance can be taken from the SBI Multi Option Deposit account. The MOD account holder can withdraw amounts from the MOD account in multiples of Rs. 1,000.
Customers can open an SBI MOD account with a specific deposit amount, and they can choose the tenure for this deposit. However, the unique feature of SBI Multi Option Deposit is that customers can withdraw funds from this account as needed without incurring penalties while leaving the initial deposit intact.
Features and Benefits of State Bank of India MOD
You should opt for a State Bank of India MOD account for the following reasons!
Flexible Tenures
It allows customers to choose a tenure that suits their financial goals. Tenures can range from a week to 10 years, offering the flexibility to tailor your investment horizon.
Interest Rates
It offers competitive interest rates generally higher than regular savings accounts, making it an attractive option for customers looking to earn more from their surplus funds.
The table below shows the available and applicable tenure and interest rates on MOD accounts for regular account holders and senior citizens. The interest rates will apply in 2023.
| Period of Investment | Interest Rates for Account Holders | Interest Rates for Regula Account Holders |
| 7 to 45 days | 3.40% | 2.90% |
| 46 to 179 days | 4.40% | 3.90% |
| 180 to 210 days | 4.90% | 4.40% |
| 211 to 364 days | 4.90% | 4.40% |
| 1 year to 1 year 364 days | 5.60% | 5.10% |
| 2 years to 2 years 364 days | 5.70% | 5.20% |
| 3 years to 5 years | 5.95% | 5.45% |
| 5 years to 10 years | 6.30% | 5.50% |
Liquidity
Liquidity is one of the standout features of SBI multi Option Deposit. Account holders can withdraw as needed, making it an excellent choice for individuals who want to maintain access to their funds while still earning interest.
Nomination Facility
Like other SBI accounts, SBI MOD offers a nomination facility. This ensures that your savings are protected and can be passed on to your chosen nominee in case an unforeseen event occurs.
Auto Sweep
It is a useful facility to transfer excess balance to your MOD account. Note this facility is available through Savings Plus accounts, and Minimum Threshold and Minimum Resultant Balances are applicable.
Partial Withdrawals
Customers can make partial withdrawals in multiples of Rs. 1000 without breaking the entire deposit. This feature is incredibly beneficial for those who need funds for unexpected expenses.
Overdraft Facility
It also offers an overdraft facility. In other words, you can avail a loan against your MOD account. This can be particularly handy during financial emergencies.
How to Open an SBI MOD Account?
Opening an MOD account is a straightforward process. You must visit your nearest SBI branch or use SBI's internet banking facility. Here's a general overview of the steps involved:
- Visit your nearest SBI branch.
- Fill out the application form for an SBI MOD account.
- Provide the initial deposit amount.
- Choose the tenure for your MOD account.
- You'll receive a MOD account receipt containing all the necessary details.
For internet banking users:
- You can open an SBI MOD account online by logging into your SBI net banking account.
- Under the FD section, tap on the e-TDR/e-STDR (FD).
- Navigate to the MOD option, select e-TDR/e-STDR and click on proceed.
- Choose the debit account number, MOD, and tenure, and click submit.
- Finally, confirm the opening of your MOD account.
Taxation on SBI Multi Option Deposit
It's important to note that the interest earned on your SBI MOD account is taxable. Depending on your overall income, the interest earned may be subject to Tax Deducted at Source or TDS if it is above Rs. 10,000 in the respective financial year.
Customers are advised to provide their Permanent Account Number or PAN details to the bank to ensure proper tax deductions. It's advisable to consult with a tax professional for specific guidance on tax implications.
Conclusion
SBI MOD is a powerful financial tool that combines the perks of a fixed deposit with the flexibility of a savings account. It offers competitive interest rates, the convenience of partial withdrawals, and the option to renew your account automatically. For individuals seeking a safe and rewarding place to park surplus funds while maintaining liquidity, SBI Multi Option Deposit stands out as an excellent choice.
Remember, the key to effective financial management is diversification. SBI MOD can be a valuable addition to your financial portfolio, complementing your savings and investment strategy while balancing growth and accessibility. It's always a wise decision to consult with an SBI representative or a financial advisor to determine how MOD fits into your financial goals and plans. So, consider exploring the possibilities SBI MOD offers and make your money work smarter for you.