Daily Deposit Account (DDS) is a disciplined way of investing, where you invest fixed amounts at a regular frequency (say, every Day or Week). For example, you commit to invest a pre-specified amount (Rs 500 onwards) every Day .
DDS is an option through which the investor can decide to invest a fixed amount on a Daily basis for a fixed period in the scheme(s) of his choice. DDS in an equity fund acts as a tool to create wealth in the long-term.
It is very simple to operate a DDS -- after the initial account opening it can work automatically through a standing instruction. Investors should not make the mistake of closing the DDS during a bear phase in the market. Markets are cyclical and during a bear phase the investor is able to get more number of units as he is able to buy low. DDS in three to four equity funds should be able to give the investor the necessary diversification.
The advantages that DDS offer include professional management, affordability, liquidity and convenience. Besides, they are well regulated, transparent and tax efficient. Having invested in a DDS scheme, the investor need not track the Net Asset Value (NAV) or performance on a daily basis.
| S.No | Tenure (In Months) | Daily Installment | Plan Amount | Meturity Amount |
| 1 | 6 Months | 100 INR/- | 18000 INR/- | 18422 INR/- |
| 2 | 12 Months | 100 INR/- | 36000 INR/- | 37690 INR/- |
| 3 | 18 Months | 100 INR/- | 54000 INR/- | 57980 INR/- |
| 4 | 24 Months | 100 INR/- | 72000 INR/- | 79100 INR/- |
DDS helps you to start investing at an early age to meet the greater expenses of your life. Saving a small sum of money regularly makes money work with greater power of compounding with significant impact on wealth accumulation.
DDS gives you the convenience to pay through Electronic clearance service (ECS), Auto Debit or NACH. You can decide the amount and the mutual fund scheme. A fixed amount will automatically get debited from your account on a date specified by you.
DDS minimizes the effects of investing in volatile markets. It helps you average out your cost by generating superior returns in the long run. It reduces the risk associated with lump sum investments. Since you get more units when the NAV drops and fewer when it rises, the cost averages out over time Thus the average cost of your investment is often reduced.
Since you invest regularly, it makes you disciplined in your savings, which leads to wealth accumulation. Disciplined investing is vital to earning good returns over a longer time frame