Fixed Deposit Monthly Income Scheme

Banks allow investors to choose the interest payout option on a fixed deposit (FD) when they book. FD monthly income plans entail the features of a conventional fixed deposit. It is a non-cumulative fixed deposit wherein investors earn monthly interest till the fixed deposit matures after a specific tenure. 

Find and compare high-yield monthly income deposits on Stable Money’s dynamic investment platform. Book any FDs of your choice and start investing without any delay without the need for a separate savings account for each FD. Also, explore our detailed guide on monthly income plans to make an informed decision.

What Are FD Monthly Income Plans?

Fixed deposits allow investors to receive interest payout monthly, quarterly, on an annual basis or on a cumulative basis on maturity. FD monthly income plans are a type of fixed deposit that allows investors to receive interest credit on their savings accounts every month.

It ensures a regular income for investors investing a lump sum of money in fixed deposits for a specific tenure. The interest rate remains unchanged for the entire tenure of the fixed deposit booked by the investors.

FD Monthly Income Scheme Interest Rates

The table below illustrates the interest rates (principal below ₹3 Crore) across prominent banks in India for senior and non-senior citizens:

Benefits of Monthly Interest payout on FDs

Here are the benefits of fixed deposit monthly income plans:

1. Predictable Source of Income

As fixed deposits offer a predetermined rate of interest, investors can predict the amount of interest payout per month. Investors like retirees looking for a regular income can benefit by investing in FD monthly income plans. 

1. Careful Budgeting

The fixed returns of FDs help investors know the exact interest amount they will receive every month. As a result, investors can seamlessly align their interest earnings and expenditures based on accurate budget planning. 

1. Enhanced Cash Flow Flexibility

Monthly interest income from FD helps investors earn a steady regular income. This ensures a smooth cash flow to meet monthly expenses, unprecedented financial circumstances and short-term financial goals. 

1. Reinvestment Opportunities

As an investor, you can reinvest your earned monthly interest from fixed deposits into other financial instruments. This can help you diversify your investment portfolio and mitigate the risks of your equity investments. 

How to Calculate Monthly Income on a Non-cumulative Deposit?

You can use an FD calculator to determine the monthly interest payout on your invested amount. Alternatively, you can calculate the interest payout manually to estimate your regular income. 

To calculate the payout using an FD calculator, you need to type in the fixed deposit principal, interest rate and tenure. Additionally, choose the payout frequency as monthly to evaluate your monthly interest payout. 

Eligibility Criteria for Monthly Income Plan Fixed Deposit

Here are the eligibility criteria for FD monthly income plans:

• The investor has to be at least 18 years old.
• A minor account fixed deposit can be opened with a guardian association.
• You can open a joint fixed deposit account to avail monthly interest payout.
• Hindu Undivided Family (HUF), associations, institutes and NRIs can open a monthly interest payout fixed deposit.

Documents Required for FD Monthly Income Plans

You need the following documents to book a fixed deposit with a monthly income plan:

• Identity proof such as a PAN card
• Address proof such as an Aadhaar card, voter card, driving licence or passport
• Passport-size photographs

How to Apply for Fixed Deposits with Monthly Interest Income?

You can seamlessly book an FD online or offline. For online FD booking, you can choose a platform that offers online FDs for different banks. Alternatively, you can visit your bank’s website to book an online FD. 

Choosing a platform that provides access to multiple banks' FDs can help you book an FD with the highest interest rate without any hassle. It helps you avoid visiting multiple bank websites to find out the highest interest rate. 

Taxation on FD Monthly Income Plans

The following are the taxation norms on fixed deposits with monthly interest plans:

• If you book a tax-saving FD with a 5-year lock-in period, you can avail a tax exemption of up to ₹1.5 Lakhs every year under the Section 80C of the Income Tax Act.
• The interest income on fixed deposits with monthly income is subject to taxation. The interest income is taxed as ‘income from other sources’ and taxed as per your applicable income tax slab.
• Banks or NBFCs deduct a 10% TDS (tax deductible at source) for non-senior citizens if the total interest income during a financial year is more than ₹40,000.
• NBFCs or banks deduct a 10% TDS on the FD interest if the total interest earned in a specific financial year is more than ₹50,000 for a senior citizen. 
• Banks or NBFCs deduct a 20% TDS on the interest income if the investor fails to submit PAN card details. 

You can avoid TDS deductions by banks or NBFCs if you submit Form 15G (for non-senior citizens) or Form 15H (for senior citizens) at the beginning of the fiscal year. 

Start your fixed deposit monthly income plan with our partnered banks and NBFCs now!