A Fixed Deposit, as opposed to a conventional savings account, is an investment that pays a greater rate of interest. The account holder must deposit a large sum of money with a financial institution for a set period of time. The tenor usually lasts anything from one month to five years. The deposit will be retained by a predetermined interest rate that will be paid to the account holder either at regular intervals (fortnightly, monthly, quarterly, or yearly) or at maturity.
A Fixed Deposit monthly income, for example, will be received by an account holder who has chosen a monthly interest payout. Institutions such as banks, non-banking financial companies, building societies, and credit unions offer FD programs.
Some of the Best Interest Rates on FDs
The following is a list of the annual interest rates on FDs offered by a few notable Indian banks in 2023 (for deposits under Rs.1 crore):
Bank's Name | Interest Rate for General Customers | Interest Rate for Senior Citizens |
State Bank of India FD | 2.90% - 5.40% | 3.40% - 6.20% |
HDFC Bank FD | 5.75% | 6.25% |
RBL Bank FD | 5.00% - 7.50% | 5.50% - 8% |
Kotak Mahindra Bank FD | 2.75% - 4.50% | 3.25% - 5.00% |
YES Bank FD | 5.00% - 7.25% | 5.50% - 7.50% |
Canara Bank FD | 2.90% - 5.35% | 2.90% - 5.85% |
Axis Bank FD | 3.25% - 5.80% | 3.25% - 6.45% |
City Union Bank FD | 3.00% - 5.25% | 3.00% - 5.25% |
How to Calculate FD with Monthly Payout?
Most of the banks that have been offering FD schemes have the FD calculator and the facility on the portal, where a user can calculate the amount.
Here is the procedure mentioned below that would help you calculate your monthly interest payout through the calculator:
Step 1:You need to go to the official portal of the bank.
Step 2:Navigate to the option that leads to the Fixed Deposit Calculator page.
Step 3:Enter the amount of deposit and select the type of customer, the type of FD, and the period.
When you provide all of these details, you will be shown the interest amount and how much potential you stand to receive in the form of an aggregate interest amount.
How to Convert from Annual Interest rate to a Monthly Interest Rate
In order to convert an annual interest rate to a monthly interest rate - follow these steps:
- You will have to convert the annual rate from percentage to decimal format (divide the rate by 100).
- Now, subtract 12 from the yearly rate (in the decimal form).
- To get your monthly rate, you will have to multiply the annual rate by the interest amount.
- Multiply the monthly rate by 100 to convert it to a percentage.
Advantages of Monthly Interest Payout FD
FDs are one of the most famous investment options in the country, and the reasons that make them preferred are:
- It will encourage individuals to save for a fixed period of time.
- Premature withdrawal could be made for a small quantity too.
- The interest on FD is much higher than on a regular savings account.
- You will be able to submit a nominee.
- There is a tax deduction that can be claimed of up to 1.5 lakhs under Section 80C.
- Senior citizens would be given higher interest rates on this tool.
- You can also make a premature withdrawal with a small amount of penalty.
How to Close your Fixed Deposit Account
Fixed Deposits with a premature withdrawal option can be canceled before the maturity date. Preclosure of an FD account is usually subject to a penalty from most banks. An account holder can close their FD by going to their bank and filling out a form. The bank would then process their request and charge the account the necessary fees. The refunds would then be transferred to the account holder, and all documents submitted at account opening would be returned. Many banks also provide an online option for closing a savings account.
To close or break an FD account online, simply follow the instructions below:
- Go to the bank's website to learn more.
- Enter your login information, such as your username and password.
- From the list of services available on the site, select 'Fixed Deposits.'
- Choose 'Close account' from the drop-down menu.
- Select the account that you want to close from the list of FDs.
- Please cooperate with any identification verification steps that may be asked.
- Your registered mobile number and email address may receive a confirmation message. Continue to verify these.
- The returns would then be sent to your savings account after deducting the penalty charges.
- Verify that the cash has been received by checking the revised amount on your account.
Certainly! I have a solid foundation in financial products like Fixed Deposits (FDs), and I can break down the concepts and nuances present in the article you provided.
Fixed Deposits (FDs) are essentially a type of investment offered by financial institutions where an individual deposits a lump sum amount for a predetermined period, ranging from a month to several years. In return, they receive interest payments either at regular intervals or upon maturity, at rates generally higher than those of traditional savings accounts.
The article touches on various crucial elements:
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Interest Rates: FDs' interest rates vary among banks. Rates often differ for general customers and senior citizens, typically offering higher rates for the latter.
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FD Calculation: Most banks provide online FD calculators where users input deposit amounts, customer types, FD types, and durations to determine potential interest earnings.
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Conversion of Annual to Monthly Interest Rates: The process involves converting the annual interest rate to a decimal, subtracting 12 from the result, then multiplying it by the deposit amount to get the monthly rate.
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Advantages of FDs: These include encouraging savings, higher interest rates compared to regular savings accounts, tax deductions under Section 80C, and preferential rates for senior citizens. Premature withdrawals are possible but may incur penalties.
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Closing FD Accounts: Premature closures are subject to penalties. Banks usually allow closure by visiting a branch or online through the bank's website. Online closure involves logging in, selecting the FD, and following instructions, with the final amount being transferred to the linked savings account after deducting penalties.
This information can be useful for individuals seeking to understand FDs better, compare rates offered by different banks, calculate potential returns, and comprehend the process of closure or premature withdrawal. If there's anything specific you'd like to delve deeper into or any queries you have, feel free to ask!
