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.
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 $$FD24-35-onlnoncummon$$ annual interest rate (monthly payout). He earns Rs. 1,05,300 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.
Cumulative vs Non-Cumulative FD: What’s the Difference?
There are two types of fixed deposit schemes:
- Cumulative FD: Interest is compounded and paid at the end of the tenure along with the principal.
- Non-Cumulative FD: Interest is paid at regular intervals—monthly, quarterly, half-yearly, or yearly. The principal is returned at maturity.
Who should choose Non-cumulative FDs?
- Individuals nearing retirement
- Freelancers or entrepreneurs with inconsistent income
- Anyone who prefers liquidity over long-term locking
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.).
