Making smart investment decisions is the best way to ensure that you meet current and future financial needs without worries. Depending on the instrument you choose, you can avail various benefits, including different pay-out options. Among these investment options is the monthly income scheme (MIS), made available under other instruments.
One of the investment instruments that also comes with a monthly income scheme is the fixed deposit. Here, the security and stability of returns is key, and you can enjoy it with an FD monthly scheme. This benefit is available because FDs are non-market-linked instruments, and as such, the returns are not affected by market volatility.
Moreover, the fixed deposit monthly income scheme is easy to get started with. This makes accessing the benefits of a monthly deposit scheme that much easier for you.
Read on for an overview of the monthly income deposit scheme.
Simply put, a monthly income scheme in fixed deposit refers to a non-cumulative fixed deposit. Under this type of fixed deposit, you receive periodic interest payouts based on the frequency you choose.
Banks and NBFCs offer multiple pay-out options to receive interest earnings during the investment tenor. These pay-out options can be monthly, quarterly, half-yearly, or yearly.
In a fixed deposit monthly income scheme, you will receive monthly pay-out for the interest earned on your investment. Given that the fixed deposit interest rate is fixed once the FD is booked, you can secure steady returns with an FD monthly income scheme.
What you earn through interest on a monthly income scheme is determined by the interest rate offered by the issuer. The monthly income scheme interest rates in banks and NBFC fixed deposits vary and can be confirmed at the time of investment.
However, keep in mind that because you receive monthly payouts, the total earnings are generally lower than if you were to invest in a cumulative FD. You can compare cumulative and non-cumulative deposits with the help of a monthly income scheme calculator.
Enter the investment amount, tenor, interest rate, and choose the different pay-out options to get an estimate of your earnings. Doing this step is crucial to the investing process, and you must only invest after proper planning.
The eligibility for investing in an FD MIS may vary based on the issuer. However, there are some common eligibility criteria which are as follows:
You should be above the age of 18
You should either be Indian or an NRI
You should have a guardian (18+ years) to invest in FD MIS as a minor
You can also invest in the fixed deposit MIS if you are a company, institution, or HUF. Be sure to check the eligibility terms of the issuer before investing. This will ensure that your investment process goes seamlessly.
Thanks to digitisation, the documentation required for various investment schemes, including MIS, has been minimised. Additionally, you can simply upload the documents on the issuers’ portal or have them collected by a representative. This allows you to invest where and when you want to without any delay.
But check the detailed list of documents required on the issuer’s website before investing. Generally, the following documents are required to invest in FD monthly income scheme:
ID and address proof (PAN card, Aadhaar card, driver’s license, voter ID)
Accurately and duly filled application form
Other KYC documents
Apart from the benefit of stable and regular earnings, here are the other perks of a MIS:
Maximised returns with lengthy tenor and no upper limit on investment amount
Withdrawal facility to fund your unplanned needs without any worries
Fixed interest rates ensure stable returns irrespective of the market volatility
Loan facility to keep your corpus safe while meeting emergency needs
Nominee option to secure the future of your loved ones in your absence
FD monthly income scheme for senior citizens has higher interest rates
Taxation on income through FD MIS is as per the regulations mentioned in the Income Tax Act. Following are the taxation specifics for a fixed deposit MIS:
If your earnings exceed ₹40,000 (₹50,000 for senior citizens), 10% TDS will be levied
If you do not have a PAN card, 20% TDS will be levied
The first thing to keep in mind is that you should check and compare various monthly income schemes before finalising one. This will help ensure that you invest in a scheme that is best suited for your current and future goals.
Apart from this, you should remember to:
Optimise your investment in FD MIS with a monthly income scheme calculator
Read all the terms and conditions about withdrawal, loan, renewal, and nomination
Check the eligibility terms and investment process before investing
Assess the processing charges and other fees, if applicable
Review the FD issuer’s rating to ensure the security of your funds
With digitisation, the process of investing, in general, has become more convenient and quicker. To invest in an FD monthly income scheme, all you have to do is visit the issuer’s website and fill out the application form. After that, submit the required documents.
You can also invest offline by visiting the issuer’s branch. Ask a representative about investing in a fixed deposit monthly income scheme and they will guide you through the process. In any case, be sure to choose the monthly pay-out option.
Choosing a monthly income scheme in fixed deposits has numerous benefits. However, to ensure that you get the best returns on your investment, it is crucial to do your due diligence.
Invest only after you have done your research and assessed which FD monthly income scheme is the best for you.
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The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products.
Yes, with a fixed deposit monthly income scheme, you can receive monthly interest earnings.
You invest a lump sum amount and receive monthly interest income on an FD MIS, y. In recurring deposits, however, you invest monthly and receive the principal and interest earnings on maturity.
To decide which monthly income scheme is the best for you, you need to check and compare the offerings of various issuers. Choose the one with the best returns and other benefits.
Your monthly income from FD MIS will depend on your investment terms. This includes your tenor, interest rate, and investment amount. You can use a monthly income scheme calculator to get an estimate.
Generally, there is no upper limit on the amount you can invest in an FD monthly income scheme. However, this may vary depending on the issuer, and you can check this on the issuer’s website or by contacting them.
The best FD monthly income scheme by banks and other issuers is the one with the highest returns. With current interest rates, you can get up to 7.95% annual interest. Some notable high-interest FDs are Bajaj Finance, PNB Housing Finance, Yes Bank FD, and HDFC Bank FD.
To invest in an FD monthly income scheme, you can visit the issuer’s website/ mobile application or the nearest branch.