Fixed Deposit Monthly Income Scheme – 7 Best Fixed Deposit Schemes with Monthly Income 2023 – Features and Benefits

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Over the years, Fixed Deposit with a monthly income scheme has become the hot favorite among all types of investors in India. The best benefit of investing in a monthly income scheme FD is that it allows the investor to withdraw as much money as and when required. These schemes also come with various tax benefits and offer high-interest rates, as well.

Let us read further about what makes a Fixed Deposit Monthly Income Scheme beneficial for investors across the country. We will also help you shortlist the Best Monthly Income Fixed Deposit Scheme towards the end of the article.

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What is a Fixed Deposit with Monthly Income Scheme in India?

As the name suggests, it is a fixed deposit deposited by an investor to gain guaranteed monthly returns. Its high scope of liquidity attracts investors because they feel confident and secure about their investment, which can be withdrawn as per the need. As compared to other monthly income schemes, a fixed deposit scheme is less expensive, and there is no charge for opening the account or managing it.

5 Benefits of Investing in a Fixed Deposit with Monthly Income

Let us acquaint you with the multiple benefits of investing money in a monthly income fixed deposit account:

  1. Optimal Monthly Income: The best benefit of investing money in an FD with monthly interest is that it reaps a steady monthly income for the policyholder. Depending on the fixed deposit amount, it helps to get the best return as a monthly payout.  
  2. Easy Withdrawal Facility: The second advantage of an FD with a monthly income scheme is that it allows the depositor to withdraw the money without any withdrawal fee.
  3. Easy Loan Facility:  A FD with a monthly income scheme offers the investor to avail an easy loan facility. The depositor can seek a loan against the FD scheme.
  4. Nomination Facility: FD with MIS or Monthly Income Scheme also offers the nomination facility. It makes another person nominated by the policyholder gain the benefits of the scheme in his/ her absence.
  5. No Fee for Processing: Another interesting thing about an FD with MIS in a bank is that it comes with no additional processing fee. You need not pay anything to open or manage such an FD account.
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Features of a Fixed Deposit Monthly Income Scheme

Having understood the various benefits of a fixed deposit with a monthly income scheme, it is time you also learn about its attractive features:

  1. Higher Earnings: Unlike the normal bank FD, a monthly income scheme fixed deposit yields higher earnings for the depositor.
  2. Guaranteed Monthly Returns: Irrespective of the market fluctuations, the depositor will get guaranteed monthly returns on an FD MIS.
  3. Longer Tenure- Higher Returns: Unlike other monthly schemes, an FD monthly scheme can opt for a longer tenure of up to 10 years. This longer duration gives the investor the chance to fetch higher returns.
  4. No Upper Limit for Deposit: Another interesting feature of a fixed deposit with monthly income is that there is no maximum deposit limit. The investor can invest as much as he/ she wants in this account.
  5. More Liquidity: Not to forget that an FD with MIS is best known for its higher liquidity. As compared to other monthly income schemes, these schemes allow the investor to withdraw the money as per the need.

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7 Best Fixed Deposit Schemes with Monthly Income 2023

The Fixed Deposit Rates vary from bank to bank. Senior citizen investors can earn higher interest rates on such schemes just like in a normal bank FD.

We are now highlighting the best Monthly Income Fixed Deposit Schemesof 2023 that will give you the best interest, so have a look:

Name of Fixed Deposit with Monthly Income Scheme Deposit Tenure Interest Rate for Senior Citizens Interest Rate for General Public
Punjab National Bank FD 7 Days – 10 Years 3.4% – 5.75% 2.9% – 5.25%
IDFC Bank FD 7 Days – 10 Years 3.2% – 6.25% 2.75% – 5.75%
Axis Bank FD 7 Days – 10 Years 2.5% – 6.25% 2.5% – 5.75%
HDFC Bank FD 7 Days – 10 Years 3% – 6.25% 2.5% – 5.5%
IDBI Bank FD 7 Days – 10 Years 3.2% – 5.75% 2.7% – 5.4%
SBI FD 7 Days – 10 Years 3.4% – 6.2% 2.9% – 5.4%
Kotak Bank FD 7 Days – 10 Years 3% – 5.8% 2.5% – 5.3%

How to Open an Fixed Deposit (FD) MIS 

To open an FD with a monthly income scheme you must be fully aware of the eligibility criteria and the essential documents required. So, here is the right information on both these parameters:

Eligibility Criteria to Open a Fixed Deposit Monthly Income Scheme

Check out the eligibility criteria to open an FD with a monthly income scheme:

  1. An investor must be a minimum of 18 years age to apply for this scheme
  2. Individuals less than 18 years can also open this account, but only a joint account with parents
  3. This account can be opened by any individual or association
  4. This account is open for Indian citizens as well as NRIs or Non-Resident Indians

Documents Required to Open a Fixed Deposit Monthly Income Scheme

To open a Fixed Deposit with a monthly scheme you must first arrange for the following documents:

  1. Duly filled application form
  2. 2 passport-sized photographs
  3. ID proof like PAN card, AADHAR card, driving license, voter’s ID card, and so on
  4. Address proof like an AADHAR card, driving license, voter’s ID card, and so on

Taxation on Monthly Interest Fixed Deposit Scheme

Interest on FD with MIS is exempted from income tax under section 80C for a deposited amount up to Rs. 1,50,000. However, the interest generated as monthly income from these FDs will be subject to taxation depending on the tax bracket of the depositor.

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Conclusion

Thus, through this post, we encourage you to save money for your future financial requirements in the form of a Fixed deposit monthly interest scheme.Not only will you be able to opt for a premature withdrawal without any fee, but you will also enjoy higher interest rates as compared to normal bank FDs.

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FAQs on Fixed Deposit Monthly Income Scheme

What is the maximum limit to deposit in a monthly income FD?  

There is no maximum limit to deposit in a bank monthly income FD. But if you wish to deposit a Post Office Monthly Income FD account, the maximum limit to deposit is Rs. 9,00,000 for an individual account, and Rs. 15,00,000 for a joint account.

What is the difference between a recurring deposit (RD) account and a fixed deposit (FD) account?  

A fixed deposit needs the depositor to deposit a certain fixed amount of money for a fixed tenure. The interest fetched on an FD depends on the deposited amount. On the other hand, a recurring deposit needs the depositor to deposit a fixed amount of money in regular intervals for a fixed tenure. An RD is a way of regular saving for the depositor.

Which is the best-fixed deposit with monthly income for 2023?  

The list below shows the best options for the highest returns on a monthly fixed deposit scheme:
Kotak Mahindra Bank – up to 5.75% interest
HDFC Bank – up to 5.5% interest
IDFC Bank – up to 5.75% interest

Which banks offer fixed deposit interest on a monthly basis?  

A majority of Indian banks offer monthly interest schemes with FDs. Following is the list of the top five banks to choose for such deposits:
State Bank of India
Axis Bank
HDFC Bank
Punjab National Bank
IDFC Bank

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Mar 31, 2023
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PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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