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Monthly Interest Payout Fixed Deposit

Fixed deposits are investment instruments offered by banks where individuals can deposit their money for a certain duration and earn a higher interest rate as compared to a savings account. Generally, an individual can open an FD account for 7 days up to 10 years. Once the money is put into a fixed deposit account, it remains locked until the time of maturity.

Interest on fixed deposits is payable on a monthly, quarterly, half yearly or annual basis. If a customer chooses the monthly interest pay-out option, it must be noted that the interest offered by the bank is at a discounted rate. The interest, which gets accrued, is then re-invested and paid during the time of maturity with the principal amount. The interest rate on fixed deposits will differ on the basis of the tenure and amount.

How to Calculate Fixed Deposit Monthly Interest Payout?

Most of the banks that offer FD schemes have the ‘Fixed Deposit (FD) Calculator’ facility on their website, where users can check the amount they stand to receive at maturity.

Following the steps mentioned below will help one find the money that is payable by the bank once the FD matures:

Step 1 - Go to the bank’s official website.

Step 2 - Click on the option that leads to the Fixed Deposit (FD) Calculator page.

Step 3 - Enter the Amount of Deposit and choose Type of Customer, Type of Fixed Deposit (Monthly Pay-out in this case) and Tenure.

On submitting all the required details, the calculator will show the rate of interest and how much the potential investor stands to receive in the form of aggregate interest amount.

Interest Rates on FD Offered by Indian Banks

Following are the interest rates applicable on fixed deposit in India. Individuals are requested to reconfirm the rates from the respective bank’s website before making any financial commitments.

Institution Interest % P.A.PeriodInvestment (Rs.)
Deutsche Bank8.00Above 1 year to 1.5 yearsLess than Rs. 1 cr
IndusInd Bank8.001 year to below 1 years 2 monthsLess than Rs. 15 lakhs
Bandhan Co-operative Bank7.65Above 18 months to less than 2 yearsLess than Rs. 1 cr
Standard Chartered Bank7.5018 Months to less than 21 monthsLess than Rs. 1 cr
Standard Chartered Bank7.401 year to 375 daysLess than Rs. 1 cr
Kotak Bank7.40390 Days (12 months 25 days)Less than Rs. 1 cr
Bandhan Co-operative Bank7.351 year to 18 monthsLess than Rs. 1 cr
Federal Bank7.301 year to 549 daysLess than Rs. 1 cr
HDFC Bank7.301 YearLess than Rs. 1 cr
Kotak Bank7.30365 days to 389 daysLess than Rs. 1 cr
HDFC Bank7.301 year 4 daysLess than Rs. 1 cr
Yes Bank7.1518 Months 8 Days to 18 Months 18 DaysLess than Rs. 1 crore
Lakshmi Vilas Bank7.001 year to 499 daysLess than Rs. 1 crore
Dhanalakshmi Bank7.00365 days to 499 daysLess than Rs. 1 crore
Canara Bank7.001 yearLess than Rs. 1crore
Tamilnad Mercantile Bank7.00Above 1 year to less than 20 months 20 daysLess than Rs. 15 lakhs
Standard Chartered Bank7.00391 days to less than 18 monthsLess than Rs. 1 crore
Standard Chartered Bank7.00376 days to 390 dayLess than Rs. 1 crore
Punjab National Bank6.901 yearLess than Rs. 1 crore
ICICI Bank6.901 year to 389 daysLess than Rs. 1 crore
Bank of Baroda6.85Above1 year to 400 daysLess than Rs. 1 crore
Oriental Bank of Commerce6.851 year to less than 2 yearsLess than Rs. 1 crore
DCB Bank6.8512 Months to less than 18 monthsLess than Rs. 1 crore
Vijaya Bank6.801 YearLess than Rs. 1 crore
State Bank of India (SBI)6.801 year to less than 2 yearLess than Rs. 1 crore
Axis Bank6.751 year to less than 13 monthsLess than Rs. 1 crore
Axis Bank6.7515 months to less than 16 monthsLess than Rs. 1 crore
J&K Bank6.751 years to less than 2 yearLess than Rs. 1 crore
Allahabad Bank6.751 year to less than 2 yearsLess than Rs. 1 crore
Syndicate Bank6.701 year exactLess than Rs. 1crore
UCO Bank6.651 yearless than Rs. 1 crore
Dena Bank6.65365 daysLess than Rs. 1 crore
Corporation Bank6.50445 days to 554 daysLess than Rs. 1 crore
Central Bank of India6.50555 daysLess than Rs. 1 crore
Catholic Syrian Bank6.501 YearLess than Rs. 1 crore
Indian Bank6.50Above 1 year to less than 2 yearsLess than Rs. 1 crore
Indian Overseas Bank6.50Above1 year to less than 2 yearsUp to Rs. 1 crore
Axis Bank6.2518 months to less than 2 yearsLess than Rs. 1 crore
United Bank of India6.00Above1 years to less than 2 yearsLess than Rs. 1 crore
Citi Bank5.25365 days to 400 daysLess than Rs. 1 crore
Citi Bank5.25401 days to 540 daysLess than Rs. 1 crore
HSBC5.00365 daysLess than Rs. 1 crore
Royal Bank of Scotland4.001 year to less than 2 yearsLess than Rs. 1 crore

(Source: www.moneycontrol.com/fixed-income/bank_fd_main.php#data)

Note - Fixed deposit interest rates are subject to change anytime as per Banks discretion.

Eligibility Criteria for Opening Fixed Deposit with Monthly Interest Payout

The eligibility criteria for openings such deposits are the same as those of FDs with annual or quarterly interest pay-out. The documents required will include the application form along with KYC documents such as identity proof, address proof etc. Documents that serve as ID proof include passport, PAN card and Voter ID card, among others, while those that serve as address proof include telephone bill, passport and electricity bill, among others.

Benefits of Fixed Deposit with Monthly Interest Payout

Fixed deposits are one of the most popular investment options in India. Some of the reasons that make it a preferred form of investment include:

  • It encourages individuals to save for a fixed tenure.
  • Interest on fixed deposit is higher when compared with that of a regular savings account.
  • Almost all deposits allow nomination facilities.
  • Tax deduction of up to Rs. 1.5 lakhs can be claimed on tax-saver fixed deposit under Section 80C of the Indian Income Tax Act, 1961.
  • Senior citizens are generally offered a higher interest rate.
  • Premature withdrawals can be made for a small penalty.

Tax on Fixed Deposit with Monthly Interest Payout

The interest earned on fixed deposit is fully taxable as per the investor's tax bracket. To avoid TDS deduction on the interest earned, an individual can submit Form 15G (or Form 15H for senior citizens) to the bank. Form 15G and Form 15H are forms that one can submit for making sure that no TDS is deducted on income, if certain conditions are met. Senior citizens can claim a tax deduction of Rs. 50,000 on the interest from deposits, on the basis of the newly inserted Section 80TTB.

FAQ's On Monthly Interest Payout Fixed Deposit

Can I get monthly interest on FD?

Yes, generally most banks provide the facility of monthly interest pay-outs on fixed deposit.

Can I make withdrawals from FD account with monthly interest?

Fixed deposits do provide the facility of premature withdrawals. However, the depositor will be required to pay a penalty to the bank.

What is better interest paid monthly or annually?

In case one chooses the monthly interest payment route, the interest that is payable is at a discounted rate. This means an individual will stand to earn slightly higher interest on fixed deposits with annual interest over that of monthly interest pay-outs.

How to check monthly interest on fixed deposits?

Most banking institutions have the ‘Fixed Deposit (FD) Calculator’ facility on their website. This calculator helps potential investors to find the monthly interest they stand to get on their deposit.

Is monthly interest on fixed deposits taxable?

Yes, the interest that is earned on fixed deposits is fully taxable.

Which bank gives monthly interest on fixed deposit?

Most banks provide the option of monthly interest on fixed deposit. SBI, Kotak Bank and Canara Bank are few such examples.

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