For many investors, especially retirees, fixed deposits are more than a parking avenue for savings. They serve as a dependable source of regular income. A predictable monthly cash flow helps manage household expenses, medical bills, and routine living costs without exposure to market volatility. This makes monthly fixed deposits particularly relevant. By offering fixed interest payouts every month, they allow investors to plan finances with greater certainty.
Understanding how monthly interest earnings are calculated is an important step before investing. Using an FD calculator helps estimate income accurately and choose the right deposit amount and tenure. Bajaj Finance FD offers flexible payout options and competitive interest rates that support structured income planning.
What is a monthly FD?
A monthly FD is a non-cumulative fixed deposit where interest is paid out every month instead of being reinvested. The principal remains locked in for the chosen tenure, while interest is credited monthly to the investor’s bank account.
This option is commonly preferred by retirees and conservative investors who rely on interest income to meet regular expenses. Bajaj Finance Fixed Deposit offers monthly, quarterly, half-yearly, and yearly payout options under non-cumulative FDs, allowing investors to align interest income with their cash flow needs.
Unlike cumulative FDs, monthly payout options focus on income stability rather than corpus accumulation.
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Factors that influence monthly interest earnings
Monthly interest from an FD depends on the following factors:
- Deposit amount
- Applicable interest rate
- Selected tenure
- Payout option (monthly, quarterly, half-yearly, or yearly)
The interest rate is fixed at the time of booking and remains unchanged for the entire tenure. As per prevailing rates, Bajaj Finance FD offers competitive interest rates across tenures, with senior citizens eligible for higher rates than non-senior investors.
While cumulative senior citizen FDs can offer interest rates of up to 7.30% p.a., non-cumulative monthly payout options typically carry slightly lower rates, as interest is paid out regularly and does not compound.
How monthly interest is calculated
Monthly interest on a non-cumulative FD is calculated using a simple interest method. The annual interest is computed on the principal and then divided into equal monthly payouts.
For example, if an investor deposits ₹10,00,000 in a monthly FD at an interest rate of 7.00% p.a., the total annual interest would be ₹70,000. This amount is divided by 12, resulting in a monthly payout of approximately ₹5,833 before taxes. The principal remains intact and is returned at maturity.
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Using an FD calculator to estimate monthly income
An FD calculator simplifies income estimation. Investors can input the deposit amount, interest rate, tenure, and payout option to instantly view expected monthly income.
An FD calculator helps investors:
- Compare income across different deposit amounts
- Assess the impact of tenure on payouts
- Apply senior citizen benefits correctly
- Plan expenses based on predictable cash flow
When using a calculator for Bajaj Finance FD, selecting the correct non-cumulative payout option and applicable senior citizen rate is essential for accurate results.
Impact of senior citizen benefits on monthly income
Senior citizens are eligible for an additional interest benefit of up to 0.35% p.a. on Bajaj Finance Fixed Deposits. While the increase may seem modest, it can meaningfully improve monthly income over time.
For retirees relying on FD payouts to meet everyday expenses, this higher rate helps offset rising healthcare and living costs. Senior citizens should always factor in this benefit when estimating income.
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Tenure selection and flexibility
Tenure selection affects both interest rates and liquidity. Longer tenures generally offer better rates, while shorter tenures provide quicker access to funds.
Bajaj Finance FD offers a wide range of tenure options, allowing investors to align deposits with financial needs. Many retirees prefer medium-term tenures to balance returns and accessibility. Staggering multiple FDs across different maturities can also help manage reinvestment risk.
Tax considerations on monthly FD income
Interest earned on Bajaj Finance Fixed Deposits is taxable under “Income from Other Sources” as per the investor’s income tax slab. As Bajaj Finance is an NBFC, TDS at 10% applies if total FD interest exceeds ₹10,000 in a financial year. If PAN is not provided, TDS is deducted at 20%.
Eligible investors can submit Form 15G or Form 15H to avoid TDS, subject to income conditions.
Reliability and ease of management
Bajaj Finance Fixed Deposit is backed by the highest safety ratings of ICRA AAA (Stable) and CRISIL AAA/Stable, reflecting strong financial stability and repayment capacity.
The digital FD journey allows investors to book, track, and manage deposits online, access interest certificates, and monitor payouts without physical paperwork.
Final thoughts
Monthly interest fixed deposits continue to be a reliable income option for investors seeking stability. By understanding how monthly interest is calculated and using an FD calculator effectively, investors can plan finances with greater clarity.
With flexible non-cumulative payout options, senior citizen benefits, strong AAA-rated safety, and digital convenience, Bajaj Finance FD offers a structured and dependable way to generate predictable monthly income.
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