• Interest rates on Monthly Income FD Schemes

    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 4.50% to 5.25% 365 days to 389 days
    IDFC FIRST Bank 5.25% to 7.00% 181 days to less than 1 year
    Union Bank of India 4.50% 181 days to less than 1 year
    Federal Bank 4.40% to 5.25% 271 days to less than 1 year
    Bank of Baroda 4.40% 271 days to less than 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 5.75% 181 days to less than 1 year
    Union Bank of India 4.50% 181 days to less than 1 year
    Federal Bank 4.90% 271 days to less than 1 year
    Kotak Mahindra Bank 4.50% 365 days to 389 days

    *Interest rates are subject to change and can be revised without prior notice

    What is a monthly income fixed deposit?

    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.

    Key benefits and features of monthly income FD scheme

    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:

    • With some banks, there is a minimum and a maximum amount that can be deposited in these accounts.
    • The interest is generally paid at a discounted rate for monthly payout FDs
    • Some banks even offer the option of monthly, quarterly or half yearly income plans.
    • Some of these products come with credit ratings that form a good indicator of how good the plan is.
    • These deposits allow for premature withdrawals to be made from them.
    • Almost all deposits provide nomination facilities.
    • The duration of these deposits can go all the way up to 10 years.
    • Some banks permit depositors to withdraw as much as 95% of the amount deposited.
    • Some of these deposits come with overdraft facilities on the savings/current accounts linked to them and any excess money needed by the account is withdrawn from the FD.
    • With some banks, no TDS is deducted by the banks on the interest earned.

    Rate of Interest on Monthly Income Scheme

    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.

    Monthly Income FD Calculator

    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.

    Eligibility criteria for opening a Monthly Income Scheme FD

    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.

    Key Information before Opening a Fixed Deposit

    Eligibility to Open an FD
    • Individual
    • Joint account Minor with a guardian
    • Partnership
    • Company
    • Any association or Institute
    • NRIs
    Documents Required
    • Application Form
    • Depositor’s photograph (2 copies)
    • Identity proof & Address proof as per KYC Norms
    • PAN Card copy/ Form 60 or 61
    • Aadhaar Card Details
    Benefits of a FD
    • Nomination facility
    • Automatic renewal option after maturity
    • Part withdrawal facility on the deposits
    • Avail loan

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