Defining the Vehicles: Monthly Accumulation vs. Lump-Sum Wealth
Both Deposit Pension Schemes (DPS) and Fixed Deposit Receipts (FDR) constitute the bedrock of personal savings in Bangladesh. However, they serve distinctly different liquidity, income, and cash-flow objectives.
A DPS is an installment-based contract designed to instill regular savings discipline by depositing a predetermined monthly sum (e.g., ৳1,000 to ৳50,000) over tenures typically spanning 3 to 10 years. Conversely, an FDR requires a single upfront lump-sum deposit (e.g., ৳50,000 to ৳1 Crore) locked for a fixed duration ranging from 3 months to 5 years.
Direct Feature Comparison Matrix
| Feature Dimension | Deposit Pension Scheme (DPS) | Fixed Deposit Receipt (FDR) |
|---|---|---|
| Initial Capital Required | Low (e.g. ৳500 – ৳1,000 monthly start) | Moderate to High (৳50,000 minimum standard) |
| Payment Frequency | Fixed monthly recurring installment | Single lump-sum upfront placement |
| Interest / Profit Calculation | Monthly compounding on progressive cumulative balance | Quarterly compounding or simple interest at maturity |
| Typical Tenures | 3, 5, 7, or 10 Years | 3 Months, 6 Months, 1 Year, 2 Years, 3 Years |
| Withdrawal Flexibility | Premature closure forfeits high rate (reverts to savings rate) | Premature encashment incurs fee or lower rate slab |
| Collateral Loan Availability | Loans up to 80% – 90% of surrendered value | Instant credit facility up to 80% – 90% of deposit lien |
Compounding Mathematics & Yield Comparison
In Bangladesh, standard commercial bank FDR products compound quarterly (4 times per annum), whereas DPS products compound on monthly progressive cycles. Consider an empirical comparison of wealth generation over 3 years assuming an illustrative 9.50% annual interest rate.
| Investment Scenario | Capital Contributed | Illustrative Gross Yield (9.50%) | Net Payout (10% e-TIN AIT) |
|---|---|---|---|
| DPS: ৳10,000 monthly for 3 years | ৳360,000 (over 36 months) | ৳57,320 | ৳411,588 |
| FDR: ৳360,000 upfront lump-sum for 3 years | ৳360,000 (Day 1) | ৳116,913 | ৳465,222 |
Premature Encashment Rules & Penalties
If you encash a DPS prior to completing one full year, virtually all scheduled banks forfeit profit entirely, refunding only the principal deposited. After one full year, premature encashment rates are generally downgraded to the prevailing low regular savings account rate (typically 3.0% – 4.5%). For FDRs, premature encashment before tenure maturity triggers a retrospective rate downgrade to the nearest completed period slab.
Compare credit cards, DPS & FDR accounts
Filter and compare published rates, eligibility requirements, and fees across Bangladesh banks.