Investors will have to pay a premature withdrawal penalty if they break their fixed deposits (FD) before the maturity date. However, some banks do offer FDs which allows the investor to withdraw from their investment sans the penalty. One such bank that offers this type of FD is the State Bank of India (SBI).

SBI’s Multi Option Deposit Scheme (SBI MODS) is a term deposit that is linked to the one’s savings or current accounts. Unlike normal term deposits, you can withdraw money whenever you want without paying a penalty.

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?
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 the SBI MODS account.

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

SBI FD interest rates (below Rs 2 crore) as on August 13, 2022

Source: SBI website

Also read:
SBI hikes FD interest rates by up to 15 bps for these tenures

What is the tenure?
The tenure for SBI Multi Option Deposit Scheme will be one to five years.


How to withdraw from SBI Multi Option Deposit Scheme?

Under SBI Multi Option Deposit Scheme, deposits are entirely liquid. According to the SBI website, customers can withdraw from the account in multiples of Rs 1,000. There is no restriction on the withdrawal limit. Customers can withdraw via an ATM, cheque or bank branch. Do keep in mind that if you partially withdraw money from the SBI Multi Option Deposit Scheme account, you will continue to earn the FD interest rates rate which was applicable at the time of initial deposit on the your balance amount. Also, investors must make sure to maintain the average monthly balance of their savings or current account linked to the SBI Multi Option Deposit Scheme.

Is auto sweep facility available?

As per the SBI website, the provision of Multi Option Deposit Schemes are also available 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. Minimum sweep amount of Rs 10,000 in multiples of Rs 1,000. This restriction on threshold limit will apply only for availing auto sweep facility. Customers can open individual standalone Multi Option Deposit Scheme (including e-MOD) with a minimum of Rs 10,000 irrespective of the threshold level.

Other points to note

• Nomination facility will be available for those opting for SBI Multi Option Deposit Scheme.
• Tax deducted at source (TDS) will be levied at the prevalent rate applicable for regular FDs.