- Discover how to get a monthly interest payout on your fixed deposits and seek a steady monthly income with a reliable financial solution.
- Learn how to open a monthly interest payout FD scheme and how you can use fixed deposit calculators to determine your monthly interest payouts effortlessly.
If you are seeking a consistent monthly income to cover your expenses and earn additional money, a monthly interest payout fixed deposit scheme can be an excellent choice. This type of scheme involves the compounding of interest on a quarterly basis, with the accrued interest being credited to your savings or current account every month. Upon maturity of the fixed deposit, the principal amount is transferred to your savings bank account.
Retired individuals often find this FD scheme appealing. Non-Banking Financial Companies (NBFCs) and banks offer higher interest rates for non-cumulative fixed deposits compared to regular savings options, with senior citizens receiving even higher rates. The monthly interest payout FD scheme offers several advantages and features, making it a popular savings option. Some notable benefits include:
- High Liquidity: Unlike other investment schemes that provide monthly payouts, this FD scheme offers greater liquidity. You have the flexibility to withdraw money whenever necessary to meet your financial requirements.
- Guaranteed returns: Regardless of market fluctuations or volatility, you receive monthly returns with this scheme. You can reinvest the received monthly interest into another investment avenue, enabling the growth of your wealth. This allows you to accumulate a larger corpus to fulfil your financial goals and needs.
- Nomination facility: You can nominate a beneficiary to receive the monthly interest payments on your behalf. This ensures that your dependents are financially secure as well.
- No processing charges: Unlike mutual fund investments, no processing fees are associated with managing your monthly interest payout fixed deposit scheme.
- Renewal option: This fixed deposit scheme includes a renewal feature, enabling you to reinvest the returns in a new fixed deposit.
How to Calculate Monthly Interest Payout?
You can utilize online fixed deposit calculators to calculate the monthly interest payout. These free, user-friendly tools eliminate the tediousness and potential for human error in manual calculations. You only need to provide specific information such as the deposit amount, tenor of the fixed deposit, annual interest rate, and the compounding frequency (monthly, quarterly, half-yearly, or annually). By selecting the monthly payout frequency, you can determine the returns you will receive each month instantly upon clicking the ‘Submit’ button.
Eligibility Criteria for Monthly Interest Payout FD Scheme
To be eligible for a monthly interest payout FD scheme, you need to meet certain criteria, including:
- Minimum age requirement: You must be at least 18 years old.
- Residency status: You can be a resident of India or a Non-Resident Indian (NRI).
- Minors: Minors can open a fixed deposit account, but it must be a joint account with their parents or guardian.
- HUFs and companies: HUFs (Hindu Undivided Families) and companies are also eligible to open an account.
How to Apply for a Monthly Interest Payout FD Scheme?
You can apply online and offline to apply for a monthly interest payout FD scheme. If you prefer the offline method, visit the nearest branch of the financial institution where you wish to open the FD account and request an application form. Alternatively, you can apply online by following these steps:
- Go to the official website of the financial institution or financial marketplace.
- Locate the ‘Fixed Deposit’ option on the online portal.
- Fill in all the necessary details, including your name, phone number, email address, principal amount, tenor, etc. Also, submit scanned copies of the required documents.
- Double-check the provided information and click ‘Submit’.
- Make the payment through net banking.
- You will receive an email or SMS containing important information. Save this message for future reference.
Before choosing a fixed deposit scheme, it is advisable to conduct thorough research. Online tools are available free of charge to compare the features and benefits of different schemes.
If you have a low-risk appetite and desire a steady monthly income, an FD with a monthly payout option is well-suited for you. The key distinction between a monthly interest payout fixed deposit scheme and a cumulative fixed deposit is that you receive interest every month in the monthly payout FD, providing you with better liquidity. In contrast, the cumulative FD provides interest and the principal after maturity. For non-cumulative FDs, the interest rates on a 1 crore fixed deposit range from 6.00% p.a. to 8.00% p.a.