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Fixed Deposit Monthly Income Scheme

FD Monthly Payout

Last Updated 24th Jan 2022

  • Monthly Income Fixed Deposit schemes offer regular fixed income on a monthly basis. Interest earned is directly credited to the investor account per month.
  • Get a higher MIS interest rate upto 6.80%.
  • An individual can choose to invest in Monthly Fixed Deposits for a tenure of 7 Days to 10 Years.
  • It offers various benefits like premature withdrawal, overdraft and loan against FD is available.
  • State Bank of India offers the SBI Monthly Fixed Deposits scheme, enabling the customers to pay a one-time lump sum amount and receive the same in EMIs.
  • SBI MIS interest rate ranges from 2.90% to 5.10%
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Fixed Deposit Monthly Income Scheme

As the name suggests, Monthly Income Fixed Deposit are the deposits where the interest earned is credited directly back to the individual account per month. This type of non cumulative investment vehicle is an ideal option for individuals who want to earn a regular monthly return fixed income on a monthly basis. The monthly income fixed deposits help in creating wealth and fetches higher interest than the savings account. As per the current rates, you must invest in PNB Housing Finance MIS Scheme to get highest return upto 6.70%. PNB Housing Finance allows you to invest in a fixed deposit monthly scheme for tenure ranging between 12 Months to 84 Months.

Best Bank For Monthly Income Scheme

Bank Interest Rate Tenure
SBI Fixed Deposit 2.90% - 5.40% 7 Days - 10 Years
HDFC Bank Fixed Deposit 2.50% - 5.50% 7 Days - 10 Years
ICICI Bank Fixed Deposit 2.75% - 4.70% 7 Days - 10 Years
Axis Bank 2.50% - 5.75% 7 Days - 10 Years
ICICI Home Finance 4.30% - 6.45% 12 Months - 120 Months
Kotak Bank 2.50% - 5.30% 7 Days - 10 Years

Top Banks Monthly Income FD Interest Rates for Senior Citizens

The Monthly Income FD Rates for Senior Citizens are 0.25%-0.75% higher than the regular monthly Income FD Rates. The table below mentions the top banks FD Rates for fixed deposit monthly income schemes for senior citizens.

Bank Interest Rate Tenure
SBI Fixed Deposit 3.40% - 6.20% 7 Days - 10 Years
HDFC Bank Fixed Deposit 3.00% - 6.25% 7 Days - 10 Years
ICICI Bank Fixed Deposit 2.75% - 4.70% 7 Days - 10 Years
Axis Bank 2.50% - 6.25% 7 Days - 10 Years
ICICI Home Finance 4.55% - 6.70% 12 Months - 120 Months
Kotak Bank 3.00% - 5.80% 7 Days - 10 Years

Based on Interest payout, there are 2 types of fixed deposits:

  • Non Cumulative Fixed Deposit : If you want to get monthly income on your fixed deposits, you can choose a non-cumulative fixed deposit monthly income scheme. The non-cumulative fixed deposit scheme allows you to receive the interest monthly, quarterly or on an annual basis. All non-cumulative fixed income FDs are taxable.
  • Cumulative Fixed Deposit : If you invest your money in a cumulative fixed deposit the amount will be reinvested for a compounded return. The interest on such deposits are paid to you at the end of the maturity period. For instance, if you have invested Rs. 2 Lakhs in your FD accounts for five years at 10% FD rates with a cumulative fixed deposit scheme. You will earn Rs. 20000 interest for the first year. So, for the calculation of FD interest next time, the interest will be calculated at Rs 220000. Therefore, the principal amount of investment changes throughout the FD tenure.
Monthly Income FD Regular FD
Interest is paid every month.Interest is paid at the end of maturity period
Interest earned is lesser as the interest is paid on the same principal amount. The interest earned on a regular or cumulative FD is higher as the principal amount is reinvested.
Suitable to investors who are looking to get regular monthly income.Suitable for investors who are looking to grow savings for long term

Benefits of FD Monthly Payout Scheme

Some of the top benefits of investing in the monthly income option of FD are:

  • Monthly income FD scheme offers flexibility as the banks provide the option of monthly, quarterly or half-yearly income plans.
  • The monthly income fixed deposit offers a higher interest rate.
  • The premature withdrawal facility is available.
  • Some banks do not even deduct the TDS on FD interest earned.
  • FD monthly income schemes also provide the overdraft facility on the account linked with them.
  • You can choose to invest in this plan for a tenure of 1 year to 10 years.
  • You can also avail loan against Monthly Fixed Deposit Scheme.

Monthly Income Scheme Calculator

The monthly income FD calculator is an online calculator which helps in computing the monthly income earned through a fixed deposit. It is a user-friendly calculator and helps you save time in complex calculations. The tool is free of cost and you can use it multiple times and compare returns for different combinations of FD rates, tenure and amount. The monthly payout FD calculator also allows you to compare the highest return for top banks for a specific tenure and investment amount.

MIS Interest Rate - Interest on FD Monthly Income Scheme

  • The interest rate offered on the Monthly Income FD scheme is similar to those in regular fixed deposits.
  • The interest rate on Monthly Income FD ranges from 1.75% to 6.80%
  • Most banks and NBFCs offer higher interest rate for senior citizens.
  • Some banks also offer higher interest rate to their past and current employees.

Taxes on Monthly Income Scheme

  • Under the fixed deposit monthly income scheme, you can get tax exemption upto Rs. 1.5 Lakhs in a financial year if you invest in a tax saver fixed deposits.
  • Banks also deduct TDS @10% if the interest income on monthly income exceeds Rs. 40,000 in a financial year.
  • The TDS limit for tax deduction for senior citizens is Rs.50000 at 10%.
  • If you do not have a PAN Card, banks will deduct TDS at 20%.

SBI Fixed Deposit Monthly Income Scheme (SBI MIS Scheme)

The State Bank of India offers an annuity scheme named as SBI Fixed Deposits monthly income scheme or SBI MIS. Under the SBI Monthly Income scheme, you get a fixed amount every month after depositing a one-time lump sum payment.

Features of the best monthly income scheme in SBI is mentioned below:

  • SBI MIS Scheme enables the customers to pay a one-time lump sum amount and to receive the same in EMIs.
  • All residents, including minors, can avail of the scheme.
  • Depositors can invest in the scheme for a period of three years, five years, seven years and ten years.
  • The minimum deposit amount for the State Bank of India Annuity deposit is based on minimum monthly annuity ₹ 1,000 for the relevant period. i.e. for three years, the minimum deposit amount will be ₹ 36,000.
  • There is no maximum deposit amount limit in SBI MIS.
  • Currently, the rate offered on SBI monthly income Fixed deposits scheme is 2.90% to 5.40%.
  • SBI MIS interest rate for the senior citizens is 50 basis points (bps) above the rates applicable for general investors.
  • The rate applicable to SBI Staff and SBI pensioners will be 1% above the applicable rate.
  • Nomination and overdraft facility is available under the SBI MIS scheme.

Eligibility Criteria for Opening a Monthly Income Payout Scheme FD

The following entities are eligible to open a monthly income fixed deposit scheme:

  • Individual
  • Joint account Minor with a parents or guardian
  • Partnership
  • Company
  • Any association or Institute
  • Non Resident individuals

Document Required for Monthly Income Scheme

You will require the following documents to open a fixed deposit in a monthly income scheme:

  • Application Form
  • PAN card
  • Aadhar card
  • Photograph (2 copies)
  • Identity proof & Address proof as per KYC norms

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FAQs

Which bank is best for the monthly interest FD Scheme?

Banks or NBFCs with high returns are considered the best option for monthly income schemes. As per the current rates, you can get upto 6.70% and PNB Housing Finance monthly FD scheme can be considered as the best MIS scheme. SBI, HDFC Bank, PNB Housing Finance and Bajaj Finserv are some of the top banks or NBFCs for the monthly interest FD schemes.

Can I get monthly interest on FD?

Yes, you can get a monthly interest payout if you choose periodic payouts, and select the monthly frequency. Monthly Fixed Deposits offers a facility to earn interest on your principal amount, which can be obtained periodically.

Which scheme is best for monthly income?

There are several schemes and financial instruments that offer monthly income to everyone. However, if you are looking for a high return and risk-free option, then the best option for monthly income is a fixed deposit where you can earn monthly returns by investing in monthly compounding interest.

How much will I get monthly from FD?

The amount earned will be dependent upon the interest rate on the Monthly Fixed Deposit. For instance, A invested ₹ 1,00,000 in annual income FD which fetches an interest rate of 6%. So, his annual income earned will be ₹ 6,000 which makes the monthly income to be ₹ 500.  Whereas, if he invests in monthly income FD which offers an interest rate of 7%, the annual interest earned will be ₹ 7,000 and monthly income will be ₹ 583.

How Can I Invest In Fixed Deposit Monthly Income Scheme ?

You must compare all the FD monthly income schemes and then select the best scheme according to your requirement. You can then invest in the FD Monthly Income scheme by any of the below-mentioned ways:

  • By visiting the nearest Bank branch
  • Via internet banking
  • Via Mobile application

What is the interest rate of the SBI Monthly Income Scheme Fixed Deposit?

The interest rate on the SBI Monthly Income Scheme Fixed Deposit is in the range of 2.90% to 5.10%. The interest in this scheme is credited monthly in the depositor’s account. Thus, it an excellent option for individuals looking for regular and secured source of income.

How much amount can be deposited in a Monthly FD Income Plan?

Various banks and non-banking financial institutions have different amount limits for investment in a monthly FD Income plan. At the same time, some banks have no limit for investment. However, some banks may allow you to invest upto ₹ 1 Cr in a monthly FD scheme.


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