can i withdraw fd interest monthly?
Yes, you can receive monthly interest on your Fixed Deposit. But for that you have to choose a specific payout option provided by banks and financial institutions. You will be asked to choose the frequency with which you want your interest to be paid monthly, quarterly, half-yearly or at maturity. So, mark your choice.
Please note that you will have to choose non-cumulative FD at the time of opening the account. The interest will not get added to your principal for compounding. Instead, it will be credited to your savings or current account every month. This is ideal for people such as retirees or anyone seeking a regular income from their savings.
Yes, it is possible to get monthly interest payouts against a Fixed Deposit. Most FD providers have this option to choose instead of quarterly, half-yearly or annual interest payouts.
Select the monthly interest payout option when you are booking your Fixed Deposit. Under this option, your FD provider will credit the interest to your linked savings account each month. Your principal investment will stay locked till its maturity.
To answer your query ‘can I get monthly interest on fixed deposit’, I am adding the calculation process for such a payout option:
- Suppose you have invested ₹1,00,000 in an FD with a 6% yearly interest.
- FD providers use a simple interest formula, i.e. SI = (P X R X T) /100. Here, P is the principal, R is the interest rate, and T is your FD tenure.
- Applying this formula, you will get a yearly interest of ₹6000. Divide it by 12, and you will get ₹500 as a monthly payout.
However, I suggest using an online FD calculator as it is more convenient, as your investment amount and the chosen FD interest might be different.
One more thing I would like to add here is that if your goal is to enhance your returns, choosing a monthly payout option will generate fewer returns. However, this option is good if you are looking for a regular income.