What is monthly payout in a fixed deposit?

Suresh had just received a huge sum from the sale of his ancestral house. However, he did not want to keep the money in his savings account. He was confused about investing it. The risk of erosion in market related instruments with the current volatility was holding him back. At the same time, he wondered if he could utilise this money to get a monthly income for household expenditure, a majority of which would help his childrens’ education. Was there a safe and secure option that could fulfil his needs?

What Suresh and many others are not aware of, is the monthly payout option in the very own fixed deposit, offered by all banks. Most banks offer two kinds of deposits- cumulative and non cumulative. In a cumulative FD, interest is payable only after the tenure opted for (ranging from 12 months to 5 years) ends, that is on maturity. Interest is compounded annually, in addition to your principal amount. If you want to withdraw from this bank deposit, or even close it before maturity, to tend to your financial needs, it can attract a penalty.

On the other hand, a non-cumulative fixed deposit gives you the option of receiving interest payouts at specific intervals as per your convenience- such as monthly, quarterly or annually. Let us suppose Suresh received 50 lakhs after the sale of his ancestral house. If he invests this money in a non-cumulative FD for a year, he can earn an interest amount ranging from 3,50, 000 to Rs. 3,76,500, depending on the bank he chooses, and the interest rate provided, which could in turn, earn him a handsome monthly pre-tax income of close to 30,000.

With more than 95 percent of households in India, both rural and urban, choosing the safety of a bank deposit over other alternate investments, it only makes more sense to go for this mode of investment. This is when there are a plethora of investment choices that give even higher returns than a fixed deposit, however, they come with higher risks as well. Not only does an FD available on Finserv MARKETS provide assured returns, it is certified by economic agencies of repute, such as ICRA and CRISIL, for its safety standards. And when you get attractive interest rates upto a maximum of 8.95 percent on such a secure deposit, it is an offer hard to resist.

It is easy to compute your monthly earnings with the fixed deposit monthly interest calculator available on Finserv MARKETS. Choose the type of FD, in this case non-cumulative. Fill in the amount and the period you wish to stay invested for. The periodic interest payout and the total interest amount will be displayed alongside. It is to be noted that the interest payout will vary with interest rates that are different for a month, quarter, half-yearly and yearly basis.

A non-cumulative bank deposit is one of the best ways to invest for those who are risk averse, and yet are looking for regular monthly income along with the safety that comes with such an instrument. It can be especially useful for senior citizens who need a financial corpus on a regular basis to take care of their day to day expenditure as well as any medical or health emergency. To encourage them, attractive interest rates are offered on fixed deposits available on Finserv MARKETS for people above the age of 60 years.

Opening an FD is no longer about standing in long queues. Technology is there to rescue you. Just log in, choose the amount you wish to invest and the period of investment in months. Specify the non-cumulative option and submit a few necessary documents such as your passport photograph, PAN and an identification proof such as Aadhar, passport, Voter Id etc. Upon verification of these documents, proceed with payment online. That’s it. So, choose the monthly payout option of a bank deposit available on Finserv MARKETS and earn while you grow your wealth.

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