Monthly Income FD (Monthly Payout)
Get FD interest every month — how banks calculate the discounted monthly payout, how much ₹1 lakh to ₹50 lakh pays per month, and tax points.
Updated 8 October 2026 · 25 banks trackedWhat you need to know
A monthly income FD is a non-cumulative deposit that credits interest to your savings account every month. Because interest is normally compounded quarterly, banks pay a slightly discounted monthly amount so that the payout is equivalent. At 7%, ₹1 lakh pays about ₹580 a month instead of ₹583.
Monthly income from an FD
| Deposit | Monthly @ 6.5% | Monthly @ 7.0% | Monthly @ 7.5% | Quarterly @ 7.0% |
|---|---|---|---|---|
| ₹1,00,000 | ₹539 | ₹580 | ₹621 | ₹1,750 |
| ₹5,00,000 | ₹2,694 | ₹2,900 | ₹3,106 | ₹8,750 |
| ₹10,00,000 | ₹5,387 | ₹5,799 | ₹6,211 | ₹17,500 |
| ₹25,00,000 | ₹13,469 | ₹14,499 | ₹15,528 | ₹43,750 |
| ₹50,00,000 | ₹26,937 | ₹28,997 | ₹31,055 | ₹87,500 |
How the monthly payout is calculated
Quarterly interest = Deposit × rate ÷ 400. The monthly payout is the amount which, if paid each month and reinvested at the same rate for the quarter, equals the quarterly interest: Monthly = Quarterly interest ÷ (3 + 3i + i²), where i = rate ÷ 1,200. At 7%, quarterly interest on ₹1 lakh is ₹1,750 and the monthly payout is ≈ ₹580.
Who should choose it
- Retirees who need a pension-like monthly income.
- Anyone paying a fixed monthly expense such as rent or an SIP from interest.
- Senior citizens should compare with SCSS (8.2%, quarterly) and Post Office MIS (7.4%, monthly) first.
Frequently asked questions
Why is the monthly interest lower than quarterly ÷ 3?
Because you receive money earlier; the bank discounts it so the total value is equal.
Is TDS deducted every month?
TDS is deducted when interest is credited once your yearly interest from the bank crosses the threshold.
Information is for education and comparison. Rates and rules change — confirm with your bank and a tax adviser before investing. FinancePortal is not a financial or tax adviser.