Month Income Scheme:
When it comes to safe investments, there is no doubt about the fact that a fixed deposit is a very attractive option since it provides safety coupled with steady growth. Some fixed deposits also go so far as to offer income tax benefits on the amounts invested in them each year. However, there are times when the people who invest in fixed deposits need to maintain constant access to that investment so as to be able to augment their monthly income.
What is a monthly income fixed deposit?
What a monthly income fixed deposit is basically a fixed deposit that can be created and earns an interest in much the same way a regular fixed deposit does with a few differences. The being that with a monthly income plan the investors either have access to the amount deposited or are paid the interest earned on a monthly basis. Some banks even let depositors withdraw the interest every month from regular fixed deposits at discounted interest rates.
Renewals and withdrawals of Fixed Deposit Accounts :
1) With some banks, there is a minimum and a maximum amount that can be deposited in these accounts.
2) Some banks even offer the option of monthly, quarterly or half yearly income plans.
3) Some of these products come with credit ratings that form a good indicator of how good the plan is.
4) These deposits allow for premature withdrawals to be made from them.
5) Almost all deposits provide nomination facilities.
6) The duration of these deposits can go all the way up to 10 years.
7) Some banks permit depositors to withdraw as much as 95% of the amount deposited.
Rate of Interest on Monthly Income Scheme :
The interest rates on these accounts tend to follow the same rates as those prescribed for the regular term deposits. They also tend to offer senior citizens a higher interest rate which can be anything from 0.25% to 0.5% over the applicable rates. These rates are decided by the banks so it’s best to confirm the exact rate with the banks before investing. With some banks, current and past employees of that banks also get higher interest rates.