Investments are of myriad kinds. While some earn good returns on maturity, others promise a fixed income at regular frequencies. The regularity of income is one aspect that many people assess while choosing their investments.
Monthly Income FD Schemes
Opening a FD account is one of the most common investment options that many people consider due to their stability and fixed nature of returns. More so because the non-cumulative FDs allow them to earn a fixed profit every month or as per their choice of frequency, thus, supplementing their existing income.
With guaranteed returns promised every month at a specific interest rate, a lot of pensioners are choosing FDs as their desired investment option. Lending institutions offer fixed deposit intrest rates that are higher than what one earns on savings bank deposits. Not very different from the other kinds of FDs that one may invest in, the promise of higher returns means better income opportunities every month. Monthly income plans that allow investors access to the interest income earned monthly. The interest earned gets credited to one’s savings account at the end of each month.
Essential Benefits of Monthly Income FDs
More than the mere prospect of monthly income, stowing away your income allows you to enjoy other benefits including
- All these FD schemes include the scope of nomination facilities which offer generational benefits.
- The tenure of these deposit scheme can go up to 10 years, which gives you flexibility.
- Many lenders allow their depositors to withdraw a certain percentage of the deposit amount.
- Many of these deposits are linked to the overdraft facilities on their savings accounts, thus, allowing investors to withdraw the excess earnings from the FD
- Many lenders do not deduct the TDS amount earned on the interest amount.
Including Monthly Income FDs in Investment Portfolio
Before including any investment in your financial portfolio, it is essential to gauge the estimated returns beforehand. It is possible with the Monthly Income FD Calculator available online that allows one to calculate the monthly interest earned from the FDs. Directly, put in the amount invested, the rate of interest applicable, and the duration of investment to assess the amount of interest payable by the lending institution every month on the FD.
For those who wish to earn a monthly return in fixed deposit, the eligibility criteria are the same as those in other FD accounts. Anyone including the NRIs is eligible to open a monthly income FD account. Besides, the documents required to open such kinds of FDs also remain the same.
Depending on the fixed deposit rates offered by many, one can choose to pay and invest accordingly. Though non-cumulative FDs may not earn returns equivalent to their cumulative counterparts, one of the most significant benefits of investing in them is that the depositors do not have to liquidate the entire investment amount in case of sudden need for money. They can withdraw from the returns credited to their savings or current account.
Interest rates vary according to the duration of the FDs bought. Before stowing your earnings in an FD account, it makes sense to check the estimated interest that you would earn from them in the long run.