What is monthly interest payout FD?

In a monthly interest payout FD, the bank pays you the interest every month instead of at maturity. The principal remains locked. Your monthly payout = (Principal × Annual rate) / 12.

Is monthly payout FD better than cumulative FD?

Cumulative FD usually gives slightly higher total returns because interest is compounded. Monthly payout is useful if you need regular income; the effective return may be lower.

FD Monthly Interest Calculator

Find how much interest you get each month on a monthly-payout FD. Enter principal and annual interest rate.

Calculate Monthly Payout

Principal (₹)

Rate (% p.a.)

Formula

Monthly interest = (Principal × Annual rate) / 12

For monthly payout FDs, interest is calculated on principal and paid each month. No compounding on interest.

FAQs

Key Terms

Maturity amount: Final value received at deposit end: principal plus accumulated interest.
Compounding: Interest earned on both principal and previously earned interest.
Annualized rate: Interest rate quoted for one year; converted internally for period-wise calculations.

Benefits of This Calculator

Quickly compare tenure and rate combinations before locking deposits.
Understand maturity, principal, and interest split through chart-style outputs.
Use formula and FAQ context to validate bank app numbers confidently.

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Who should choose monthly-payout FDs

Monthly-payout FDs (sometimes called FD-MIS or monthly interest scheme) credit interest to your savings account at the end of every month instead of letting it compound. Because there is no compounding, the effective annual yield is lower than a cumulative FD at the same headline rate. In return you get a predictable cash inflow, which suits retirees, anyone living off interest income, and households that need to cover a recurring EMI or rent from FD interest.

Banks usually offer monthly payout only on tenures of one year and above, with a minimum deposit of ₹10,000 to ₹25,000 depending on the bank. The interest credited each month is fully taxable in the year it is received, and TDS still applies once your total interest crosses ₹40,000 (₹50,000 for senior citizens). For lump sums of ₹15 lakh and above, retirees usually compare this with the Senior Citizen Savings Scheme (SCSS), which currently pays a higher quarterly payout.

Worked example: ₹10,00,000 at 7.0% — monthly payout

Principal: ₹10,00,000
Annual rate: 7.00%
Monthly interest: ₹5,833
Annual interest: ₹70,000

The same ₹10 lakh in a 5-year cumulative FD at 7.00% would mature at ₹14,17,625 — i.e., ₹4,17,625 of interest over five years (₹83,525/year). The cumulative version yields about ₹13,500 more per year because the interest itself earns interest.