The country’s largest bank, State Bank of India (SBI), has made an important change for its crores of customers. The bank has changed the rules of its special Multi Option Deposit (MOD) scheme.
From now on, to use this scheme, you must maintain at least ₹50,000 in your savings account. Earlier, this limit was ₹35,000.
This means customers will now have to keep more money in their account than before to enjoy the benefits of this scheme.
While this may be difficult for small or medium account holders, those with higher balances will continue to benefit from it.
What is the MOD Scheme?
The MOD scheme is a smart facility for customers who maintain higher balances. If your savings account has more than ₹50,000, the extra money automatically turns into a fixed deposit (FD) in small units of ₹1,000.
The FD earns the same interest rate as a normal term deposit, which is higher than a savings account interest.
If your savings account balance drops, SBI automatically withdraws money from the MOD deposit and credits it back to your account.
Senior citizens get the added advantage of extra interest rates under this scheme.
In short, you get the flexibility of savings and the returns of FD at the same time.
Who Will Benefit From This Change?
Not Beneficial for Smaller Balances: Customers with balances between ₹35,000 and ₹50,000 will no longer be eligible for this scheme. For them, this is a small loss because an easy way to earn more interest has closed.
Still Profitable for Larger Balances: Customers with more than ₹50,000 in their account will continue to find this scheme very rewarding, as it offers both easy liquidity and better returns.
This decision is also part of SBI’s strategy to manage deposit costs. By raising the limit, the bank wants to avoid converting smaller balances into FDs. While small account holders may feel left out, the scheme remains attractive for big depositors.
If you want to benefit from the MOD scheme, plan to keep a higher balance in your savings account. It’s also wise to consult a financial advisor before deciding.