Do you want to calculate how much you can get from your fixed deposits every month? then use moneycontain Monthly Payout FD Calculator, which is designed in such a way that you you can now calculate the overall returns on your Fixed Deposits (FD) on monthly basis as well as the monthly payouts.
How To Use Monthly Payout FD Calculator?
To use the below Monthly Payout FD Calculator, you have to enter the lumpsum amount you want to deposit, enter the expected rate of interest on your fixed deposit.
Than Chose the investment period (in months) thereafter you need to enter the compound interest paid to you on deposits, this can be 1 if interest is paid once in a year, 2 for half yearly, 4 for quarterly (which banks pays usually).
In case if the interest is paid each month can enter 12 , so on and so forth. Once you entered the values Monthly Payout FD Calculator will show you the future value i.e. the total amount you will get on maturity of your FD, total return earned on the initial investment made and the monthly payouts you may get every month on deposits.
Now that you have used the monthly payout FD Calculator let us know in brief about some of the important aspects related to fixed deposits in India.
How Fixed Deposits (FD) Works in India?
In laymen terms Fixed deposit (FD) means depositing a fixed amount (usually lumpsum) in a bank or non-banking financial companies (NBFC) to get guaranteed interest earned on your initial invested amount.
FD is a financial instrument which helps an individual to earn higher interest than saving accounts.
You can opt for the money (interest earned) to be given once at the maturity of the FD or at regular intervals. What I really like about fixed deposits is the guaranteed returns, which you as an investor will already know.
If we talk about other form of investments such as SIP in an mutual fund, the returns are not guaranteed, It may give you higher or lower return than your expectation.
That is why usually people prefer to invest in FD more compare to any other form of investment.
Fixed deposits are made for fixed time period which ranges anywhere between 7 days to 10 years usually.
Which Banks Gives Highest Rate Of Interest On Fixed Deposits (FD) In India?
To be honest interest rates keeps on changing often on FD subject to changes in RBI interest rates policies, moreover there are different interest rates depending upon the tenure (7 days to 10 years) of investment as well as investor types. (Normal and Senior Citizen)
Having said that, the tenure plays a significant role in returns, longer the tenure of investment more returns can be earned and vice-versa. Interest earn on FD are generally ranges between 3.5% to 8% it also depends upon the bank or NBFC you are choosing to make the FD.
Below are the list of banks which gives best interest rates on FD in India:
Banks Providing Best FD rates for 3-year Tenure:
Banks Providing Best FD rates for 5-year Tenure:
Small Finance Banks Providing Best FD rates for 5-year Tenure:
Small Finance Banks Providing Best FD rates for 3-year Tenure:
Note: Returns shown in above image can be changed by bank depending upon their policies, kindly confirm with the banks about all details before making FD.
What Are Advantages of Fixed Deposit (FD)?
There are many benefits or say advantages of doing Fixed Deposits let us touch them one by one:
1. Better/Higher interest rates
FD does gives higher interest rates than the interest rate offered on savings account deposits. If you are investing for long term duration one can expect more better returns on invested amount.
2. Assured/Guaranteed returns
One can rest assured about the returns from fixed deposit as they are predefined and does not depend on any stock market fluctuations. One should be able to know the returns from his/her investment before investing. Due to guaranteed returns from FD it is most trustworthy type of investment for people.
3. Major Tax Benefit
Investors can claim deductions for up to Rs. 1.5 lakh per financial year under section 80C up to Rs 1,50,000 under the Income Tax Act, 1961. The interest is added to the income of the taxpayer and taxed at the applicable tax slab rates.
4. Flexibility of Investment Period
The tenure or investment period on a fixed deposit (FD) is very flexible. As an investor you can select any tenure ranging from 7 days to 10 years. You can also invest in multiple fixed deposits with various tenures with the same or different bank and NBFC.
5. Highly Liquid
A process of easily buying and selling can be termed as liquidity. An investment can be called as liquid when it can be easily converted into cash.
FD gives investor a free hand In case of any emergencies, you are free to withdraw the investment. However, a small penalty fee will be levied and the balance amount will be credited to your bank account.
6. Loan Benefit
In case if there is requirement of loan you can take benefit from your FD to avail a loan avail against a fixed deposit. You can get a loan up to 90% of the principal amount invested. Simultaneously, you will earn interest on the fixed deposit and pay interest on the loan.
What Are Drawbacks of Fixed Deposit(FD)?
As an investor doing investment in any financial instruments such as stocks, mutual fund, gold, bonds, real estate or for that matter FD, you should be aware of the drawbacks or disadvantages as well, let us know them step by step in case of FD:
1. Interest Rate and Inflation
Many investors who invest money through FD, does not count the rate of inflation.
Most first time investor miss this point, they only think, ok this will be the amount i would be getting at the end of my FD. However, with time the value of money changes, what I means to say the value of Rs.100 after 25 Years would not be the same.
Due to inflation the prices or goods of any economy or country increase over a period of time. Hence you should account inflation while calculating your FD returns.
To account inflation in your future value investments either drop the expected rate of return on investment, for example, if you are expecting 9.5% return on your investment you need to subtract the inflation rate for same period.
So, let say the average inflation for last 5 years is 3.5% so instead of taking 9.5% expected return, you count your return on 6%. You can get the inflation rate from here for India.
To find the real interest rate, we take the nominal interest rate and subtract the inflation rate.
Real interest rate = nominal interest rate − inflation rate.
At the same time there is another method or concept called present value or discounting, this helps you in knowing the (PV) present value of your future investments.
Calculate the present value of your future investment using moneycontain Reverse Inflation calculator.
2. Tax on interest earned
The interest earned from fixed deposit is taxable. The tax deducted at source on FD can range from 0% to 30%, depending on income tax bracket of the investor.
Financiers deduct 10% TDS if your interest earned is more than Rs. 10,000 in a year, if your PAN details are available with them. However, in case your PAN details are not provided to your financial institution, 20% TDS will be deducted.
If your total income is below the minimum tax slab of 10%, you can claim a refund of the deducted TDS. You can also avoid the deduction by submitting Form 15G to your financial institution, and submitting Form 15H if you’re a senior citizen.
If you fall in the higher tax bracket (20% or 30%), you would have to pay extra tax over and above the TDS deducted by your NBFC or bank
3. Penalty on premature withdrawal
Many people ask, Do I need to pay any penalty on premature closure of Fixed Deposits? Answer is Yes, A premature withdrawal from FD attracts a penalty and lowers interest.
Therefore before making up your mind to invest money be assured about whether you can keep that amount for a particular period of time or not.
4. Insurance of the FD
The amount invested in fixed deposits is insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to Rs 1 lakh per bank per account. Which means if the bank or your NBFC company makes a default, DICGC can only secure up to Rs.1 lakh.
Hence it becomes very important for you to select good renowned banks or NBFC before making any fixed deposits. Never put all eggs in one basket
Can I Get Monthly Interest On Fixed Deposits?
Yes, you can get monthly interest on FD, Banks and NBFC gives investor various schemes while making a FD. You can get a monthly interest payout, if you choose periodic payouts, and select monthly frequency.
When you invest your money in FDs, you gain interest on your principal amount, which can be obtained periodically.
So, if you’re looking for a monthly income from your investment, you can choose to get your interest payouts on a monthly basis.
However, your interest rate changes based on your interest payout frequency. The more frequently you withdraw your interest, the lesser interest you gain overall.
Frequently Asked Question (FAQ):
Who all can Invest in Fixed Deposits (FD)?
- Individuals jointly with other Individuals
- For Minor Individuals by Guardian
- Sole proprietary concerns
- Joint stock companies
- Any other entity not prohibited by RBI
What is the minimum tenure of investment in an FD?
The minimum tenure of investment in an FD is 7 days.
What is the maximum tenure of investment in an FD ?
The maximum tenure of investment in an FD is 10 years.
What is the minimum amount of investment in an FD?
Minimum amount for opening an FD is Rs.1000 and there is no maximum amount
Does nomination facility available for Fixed Deposits ?
Yes, nomination facility is available for Fixed deposits.
Can I withdraw FD before its maturity?
Yes. If you need funds urgently, you can avail premature withdrawal of your Fixed Deposit.
How will I be notified that my deposit has matured?
You will be notified when your deposit is about to mature, and again on the date it matures through SMS and e-mail.
Can I take loan against my FD?
Yes, you can get loan against FD subject to terms and conditions
How much is Monthly interest for 10 lakh fixed deposit?
Depending on the interest rates and tenure the monthly payout gets decided, as an example suppose your bank gives 7% p.a. returns on your fixed deposits and investment time period is 5 years then you will get about Rs. 6,913 per month as an interest in your account.
Let us take another example, suppose you want to find out 30 lakhs fixed deposit interest per month with rate of interest on FD is 7.8% and tenure is 10 years, using the moneycontain Monthly Payout FD Calculator the result would be Rs.29,129 per month.
However, keep in mind that if you keep on taking out the whole interest earned on the principal amount deposited at the beginning of the FD, then even at the end of the tenure the maturity will almost be the same amount that it was at the starting.
I hope you have tried calculating the returns by using the moneycontain Monthly Payout FD Calculator, doing a manual calculation takes much of time, therefore feel free to use the FD calculator anytime you want.
Doing an investment with less risk may give less returns but what is most important is the peace of mind. That is why people usually makes investment in FD rather than any other form of investments.
You can also check Moneycontain Monthly SIP Calculator with inflation to know how much need to invest today to reach your future financial targets.
In case you are looking to buy a home than please check this ultimate guide on home loan and Moneycontain home Loan calculator. It calculates your EMI’s as well as Interest amount and lot more.
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Note: Please do not take this as any recommendation, to trade or invest. This is just for reference, to make you understand more about the usage of FD calculator with monthly payout and its importance, under no circumstances intended to be used or considered as financial or investment advice, a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset.
Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only. All investments are subject to risks, which should be considered prior to making any investments.