Can I Withdraw Interest Money From My Fixed Deposit Monthly?

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FinanceNews

Fixed deposits are the backbone of most investment portfolios. These are time deposits deposited for a specific, chosen tenor and the interest paid is according to this time period. Fixed deposits are your first line of investments if you are unsure of other investments. It can be done for a long term period or a short term like 7 days as well with a bank. They are versatile investments allowing you various features in place such as early withdrawal, periodic payout, and loan against FD. So if you are thinking of using your FD for your monthly expenses or directing its payout to another investment, it is easily doable.

Periodic Payout

A periodic payout on an FD can be monthly, quarterly, or half-yearly. You have the option of choosing this while creating an FD. You can use the fixed deposit monthly interest calculator to find out the effective interest rate you will earn. If you are looking at a high paying and secured FD, then look no further than company FDs like Bajaj Finance FD. It provides 1-2% higher interest rate than bank FDs and is deemed creditworthy by credit rating agencies like ICRA and CRISIL Rating. Bajaj Finance FD is rated MAAA/stable by ICRA and FAAA/stable by CRISIL which provides you an assurance of timely repayment of principal and interest.

Monthly Interest Earned on Non-Cumulative Fixed Deposit

The non-cumulative fixed deposit allows you to earn periodic interest payouts depending upon the payout frequency (quarterly, monthly, half-yearly) chosen by you.

As the table below shows, Bajaj Finance FD pays interest of 7.72% for a tenor ranging from 12-23 months and 8.28% for 36 months for a monthly payout. This is the effective interest rate.

Tenor in Months Minimum deposit (in Rs.) Cumulative Non-Cumulative
Monthly Quarterly Half-yearly Annual
12 – 23 25,000 8.00% 7.72% 7.77% 7.85% 8.00%
24 – 35 8.15% 7.88% 7.93% 8.00% 8.15%
36 8.60% 8.28% 8.34% 8.42% 8.60%
Special tenors scheme
15 Months 1,00,000 8.05% 7.77% 7.82% 7.89% 8.05%

You can go to online Fixed Deposit monthly interest calculator and check the deposit interest for monthly payout. For example, a new customer who has invested in an FD of Rs. 25,000 for a tenor of 36 months, will earn interest payouts (depending upon the choice of interest payout frequency) as shown in the table below:

Interest Payout Frequency Applicable Interest Rate Interest Payout
Monthly 8.28% Rs. 173
Quarterly 8.34% Rs. 521
Half yearly 8.42% Rs. 1,053
Yearly 8.60% Rs. 2,150

This is less than the interest earned on the cumulative fixed deposit because the interest is paid out and not added back to the principal for further investment. Hence, there is no additional calculation of interest, and you lose out on that incremental payout at the end. However, if your need for the monthly payout is essential and serves you more, it is a good decision to go for it.

A monthly payout can be used to add on your income for monthly expenses or can be earmarked for another investment like a mutual fund.

Using your FDs wisely

You can also strategize a number of FDs with maturities at specific intervals to achieve a payout one after the other in the form of a stream of payments.

Pick additional features for maximum benefits

You can utilise a number of additional features offered by Bajaj Finance FD that will increase the usability of the FD:

  • Auto-Renewal – Go for the auto-renewal feature that will avoid the hassles for re-creating the same FD if you do not need the cash.
  • Debit Card – You can also look at a debit card facility which allows you to invest in FD on the go.
  • Loan against FD – Another useful feature for immediate liquidity is a loan against FD up to 75% of the value of the loan. 
  • Multi-Deposit – This is an interesting feature which allows you to deposit one lump sum and break it into multiple FDs by choosing different tenors for each amount.

Thus, with Bajaj Finance Fixed Deposit(FD) you can not only earn periodic monthly payouts, but also earn high interest rates to fit well into your portfolio.

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