Fixed Deposit (FD) monthly income schemes are an ideal option for those who want to earn a regular fixed income on a monthly basis. There are many monthly income schemes offered by banks and this will help the investor earn a supplementary income. This type of term deposit promises the investor guaranteed returns at a certain rate of interest, every month. This type of investment is a good option, especially for pensioners, who are looking to augment their income in some way.
| Top banks monthly income FD interest rates | ||
|---|---|---|
| Bank | Interest rate | Tenure range |
| Kotak Mahindra Bank | 6.80% | 365 days to 389 days |
| Union Bank of India | 6.75% | 10 months to 14 months |
| Federal Bank | 6.70% | 1 year |
| Allahabad Bank | 6.50% | 1 year to less than 2 years |
| Bank of Baroda | 6.45% | 1 year |
*Interest rates are subject to change and can be revised without prior notice
| Top banks monthly income FD interest rates for senior citizens | ||
|---|---|---|
| Bank | Interest rate | Tenure range |
| IDFC Bank | 8% | 366 days |
| Union Bank of India | 7.25% | 10 months to 14 months |
| Federal Bank | 7.20% | 1 year |
| Kotak Mahindra Bank | 6.98% | 365 days to 389 days |
*Interest rates are subject to change and can be revised without prior notice
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A monthly interest fixed deposit is a type of term deposit, where the interest earned is credited directly back to the investors account per month. This is a fixed deposit that earns an interest in much the same way as a regular fixed deposit does with a few differences. The difference being that with a monthly income plan, the investors either have access to the interest earned on a monthly basis. Banks usually allow depositors to earn interest every month from regular fixed deposits at discounted interest rates. The monthly income plans are generally linked to a savings bank account.
Read also : Monthly Interest Payout Fixed Deposit
While the features of these accounts can vary from one bank to another, a general set of features that you may see with these accounts are:
Know all benefits of Fixed Deposit here:Benefits of Fixed deposits
The interest rates on these accounts tend to follow the same rates as those prescribed for the regular term deposits. They also tend to offer senior citizens a higher interest rate which can be anything from 0.25% to 0.5% over the applicable rates. These rates are decided by the banks so it’s best to confirm the exact rate with the banks before investing. With some banks, current and past employees of that banks also get higher interest rates.
If you are using a regular fixed deposit and withdrawing the interest every month to augment your income, you should know that sometimes banks will provide discounted interest rates.
A monthly income fixed deposit calculator is used to calculate the monthly interest that will be earned out of an FD. To put it in simple words, an FD interest calculator can be used to determine how much interest will be payable at the end of each month on your term deposit. The BankBazaar FD interest calculator is an easy-to-use tool that can be used to calculate the interest earned on an investment.
The eligibility criteria for these deposits follow the same rules as those for the regular term deposits where any individual, company, HUF or association of people can open the fixed deposits. Even NRIs are eligible to open monthly income FDs.
The documents required also tend to be the same and will include the application form along KYC documents like an identity proof, address proof etc.
The biggest advantage of the monthly income fixed deposit is that with these products, if depositors need extra money in a month, they don’t have to liquidate that entire deposit. They can just withdraw what they need.
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Bajaj Finance Ltd has recently announced that the minimum limit on its Fixed Deposit (FD) scheme will be Rs.25,000. The company will offer an annual interest of 8.05% on deposits made for a tenure of 36 to 60 months. Earlier the minimum deposit amount was Rs.75,000 in Delhi and Mumbai, and Rs.50,000 in other parts of India. Senior citizens will receive an additional interest of 0.25% on deposits of up to Rs.1 crore. Existing customers will receive an additional interest of 0.10%.
12 April 2017
The first half of March saw around 50 lakh transactions instead of the average 20-30 lakh annual transaction rate. Around 13 lakh new accounts were opened in the second half of March as against an average of 4-5 lakh in a month, according to a Post Office official. Post Office savings schemes, such as the Monthly Income Account, gives the interest rates in vogue at the time when the account is opened. For instance, if you open a Monthly Income Account before April 1 at the post office, you will receive the interest rates prevalent before the rate cut came into force.
The government has reduced the interest rates of several small savings instruments. The five-year National Savings Certificates interest rate has been brought down to 8.1 percent instead of 8.5 percent earlier. For the five-year Monthly Income Account, you’ll get only 7.8 percent as against the earlier 8.4 percent.
19 April 2016
Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.
