Fixed Deposits continue to be the flavor of the season, not just because they are one of the safest instruments of investment but also because you have Fixed Deposits that provide a guaranteed source of income in your bank account every month.
How can we get monthly interest on Fixed Deposits?
A Fixed Deposit is the sum of money you keep with a bank as a deposit for a fixed period of time against which the bank pays you a fixed rate of interest. You can pick the mode of interest payment. There are mainly two types of modes of receiving the interest. One is cumulative option where the interest is compounded on a quarterly, paid on the maturity of the FD/ autorenewed. The other is a non-cumulative option which is paid in the form of monthly interest or quarterly or on maturity.
Why Fixed Deposits with monthly interest are popular?
FD with monthly interest payouts have been doing well with the investors who seek regular monthly income in the form of FD interest. It is popular with retirees and those who invest in it with the hope of receiving steady pension. The big difference between other FDs and monthly interest FDs is that the investor can keep receiving some interest on the FD corpus they have invested every month which provides him/her with liquidity, though the rate of interest earned is slightly higher in the cumulative options. AFD interest calculator can help you understand the interest you will earn on the other FDs and on monthly interest FDs that will help you make an informed decision. However, you must know that the rate of interest on monthly interest FDs is higher than what you will earn by letting your money sit in current and savings account.
Benefits of Fixed Deposits monthly interest products
- Available in long tenures too
Some banks offer monthly interest FDs for tenures as long as 10 years, which is a substantial period of time to receive an interest income.
- Credit ratings
With an interest income coming into your account every month, you may be suspect about the quality of the FD. But these FDs are rated by reputed credit rating agencies for you to take a well informed decision.
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- Premature withdrawals
Some of these deposits also have the option for premature withdrawals provided you meet the requirements. You must keep in mind that breaking your FD prematurely may attract a penalty.
- Overdraft facility
Some banks offer an overdraft facility against FDs so you do not need to liquidate your FDs in case of small financial contingencies.
How is the interest on Fixed Deposits monthly interest payout calculated?
The easiest way to calculate the interest you will earn by parking money in a Fixed Deposit that pays monthly interest is by using an online FD calculator. You simply need to visit the relevant website and put in the relevant details. Simply adjust the figures till it matches your relevant financial goal.
Looking to open aFixed Deposit? Click to get started!
You can create your Fixed Deposit Asset today with an HDFC Bank Savings Account. New customers can book a Fixed Deposit by opening a new Savings Account, existing HDFC Bank can book their Fixed Deposit by clicking here
Read more on how to get thebest FD interest rateshere!
*Terms and Conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circ*mstances.
