Monthly Income Fixed Deposit :When it comes to fixed deposits, what usually comes to mind is to lock your money for some time and earn fixed interest on maturity. But many people do not know that fixed deposits also provide the facility of monthly income. Many major banks including State Bank of India provide the facility of monthly income in fixed deposits. If you are also looking for monthly fixed deposit income to cover your expenses and generate additional income, then Monthly Interest Payout Fixed Deposit is a good option. Banks do not place any limit on the maximum deposit amount for investment in Fixed Deposit Monthly Income Scheme. Banks provide nomination facility in Fixed Deposit Monthly Income Scheme. There is also loan facility on the scheme.
Good option after retirement
Monthly interest payout fixed deposit is a better option after retirement. After retirement, many people want to invest their savings in such an option where they can get some regular income for daily expenses. Actually there are two types of schemes in FD, one is cumulative and the other is non-cumulative scheme. In cumulative scheme, a lump sum amount is deposited for a fixed tenure. At the same time, on maturity, the amount is received by adding both principal and interest. Whereas in non-cumulative scheme, regular payout is done at a fixed interval. While applying, you can choose the option of monthly, quarterly, half yearly and annual payout. On choosing the monthly option, the amount comes into the account every month.
Which is the better option?
For investors who do not want to take market risks, Fixed Deposit Monthly Income Scheme is a better option. Under this, a fixed amount is received every month as monthly return on investment in fixed deposits. Senior citizens get 50 basis points more interest on this than normal FD. In this, the interest earned annually is divided into 12 months and sent to the account every month. Generally non-cumulative schemes are also for 12 months to 60 months. After the maturity period is over, you get the principal amount back. You can start this scheme again later.
Eligibility for FD monthly income
-To get the facility of monthly income, any individual or organization can start an FD scheme.
-The individual must be at least 18 years of age.
-They can be citizens or non-resident Indians living in India.
-The account can be opened in the name of a minor, however, they will have to open the account as a joint account with their parents.
-Companies and Hindi-Joint-Family can open Monthly Income FD Account.
-Any association or institution can open an account.
What are the tax rules
If you invest in a tax saver fixed deposit account, you can avail tax exemption on amount up to Rs 1,50,000 in a financial year under Section 80C of the Income Tax Act. If the monthly income or return in any financial year is more than Rs 40,000, then the bank deducts 10 percent TDS. In case of senior citizens, this amount is Rs 50,000.
Interest rate on FD monthly income (7 days to 10 years)
HDFC Bank: 3% to 6.25%
SBI: 3.4% to 6.2%
Axis Bank: 2.50% to 6.25%
Kotak Bank: 3% to 5.8%
IDFC First Bank: 3.25% to 6.25%
Bank of Baroda: 3.30% to 5.75%
PNB: 3.40% to 5.75%
IDBI Bank: 3.20% to 5.75%
(Source: Bank Websites, Bank Bazaar, Policy Bazaar)
