When it comes to secure investments, fixed deposits remain one of the most trusted choices. But did you know that an FD can also be your source of steady monthly income? With a Non-Cumulative Fixed Deposit, you don’t have to wait till maturity to access your returns. Instead, you receive a payout every month—ideal for covering household expenses, supporting retirement, or even supplementing income during career gaps.
This setup is often referred to as an FD monthly income scheme, allowing investors to earn a regular payout while keeping their capital secure.
Let’s explore how this monthly income scheme works and how you can benefit from it.
What is a Fixed Deposit Monthly Income Scheme?
A Fixed Deposit Monthly Income Scheme (or Non-Cumulative FD) is a way to invest a lump sum and earn interest at regular intervals. Rather than receiving all your returns at maturity (as with cumulative FDs), this option gives you fixed monthly payouts based on the interest generated.
This makes it perfect for:
- Senior citizens looking for predictable income
- Homemakers managing monthly expenses
- Parents saving for school fees
- Professionals planning a career break
Get monthly interest payouts straight to your bank account—no follow-ups, no surprises. All you need is a one-time investment.
Benefits and features of monthly income FD scheme
Here are some of the major highlights of monthly income FD schemes:
- These schemes offer flexibility with no maximum investment limit, allowing individuals to invest based on their financial goals and capacity.
- Compared to many traditional plans, monthly income schemes provide greater liquidity. Since there is no lock-in period, investors can withdraw funds during emergencies.
- No processing fees are charged while opening an account under this scheme. Additionally, the exit load is minimal—typically less than 1% of the invested amount.
- The returns are generally higher than standard fixed deposits and even the Post Office Monthly Income Scheme, offering better income potential.
- While the monthly payout amount may vary, investors benefit from consistent returns, making it a reliable income source.
- These schemes are handled by experienced fund managers who actively monitor market trends and make informed decisions to optimise returns by balancing debt and equity investments.
Top fixed deposit monthly income schemes
Here are some commonly known monthly income oriented investment options available to investors in India:
Post office monthly income scheme
The Post Office Monthly Income Scheme (POMIS) is considered a relatively stable option as it is backed by the Government of India. It currently offers an interest rate of about 7.40% per annum, payable monthly. The scheme comes with a fixed tenure of five years. Investors can start with a minimum amount of Rs.1,500, with a maximum limit of Rs.4,50,000 for single accounts and Rs.9,00,000 for joint accounts.
Senior citizen savings scheme
The Senior Citizen Savings Scheme is designed mainly for retired individuals seeking regular income. Supported by the government, it is available through select post offices and authorised bank branches. Eligible investors can enrol in the scheme within a specified period after retirement to receive periodic payouts.
Monthly income plan
A Monthly Income Plan (MIP) is a type of mutual fund that mainly invests in fixed income instruments, with a smaller portion allocated to equity related assets. These funds may provide periodic income, but returns are market linked and not guaranteed, as payouts depend on overall fund performance.
How to apply for fixed deposit monthly income scheme?
To start a Fixed Deposit Monthly Income Scheme, the depositor must hold a savings account with the respective bank. If they don’t have one, they’ll need to visit the nearest branch to open an account.
Here are the steps to open a savings account at the branch:
- Step 1: Fill out the application form to opt for the fixed deposit monthly income scheme.
- Step 2: Complete the KYC process by submitting valid proof of identity and address.
- Step 3: Provide two recent passport-size photographs.
How to calculate your monthly income from FD
It’s simple. Use an FD Calculator to find out how much you’ll earn monthly. Just input:
- Investment amount
- Tenure (12 to 60 months)
- Citizen type (senior or under 60)
- Payout frequency
Let’s say Kapil, 57, is retiring in 3 years and wants regular income post-retirement. He invests Rs. 5 lakh in a non-cumulative FD for 3 years at a 6.74% annual interest rate (monthly payout). He earns Rs. 1,01,151 in total interest, with fixed monthly payouts for 36 months.
Plan your monthly income in advance using the FD Calculator—know your returns before you invest.
Documents Required for a Monthly Income FD Scheme
To open a monthly income fixed deposit account, you typically need to submit the following documents:
- Duly filled application form
- Two passport-size photographs of the depositor
- Valid identity proof
- Address proof
- PAN card
- Aadhaar card
Need flexibility? Choose your payout frequency—monthly, quarterly, half-yearly, or yearly with Bajaj Finance FDs. Check out latest rates (up to 7.30% p.a.).
