FD Monthly Income: Nowadays everyone wants regular income with safe investment. If you have a lump sum of Rs 10 lakh, Fixed Deposit (FD) can be a great option. This keeps your money safe in the bank. Apart from this, you also get a fixed income every month. But the big question is how much money you will get every month on a Rs 10 lakh FD. The direct answer to this depends on the interest rate of the bank. The more interest the bank gives you, the higher your monthly earnings will be.

Income is determined by the interest rate

FD interest rates in banks vary according to the type of bank as well as the time limit. If you invest money in big reputed banks like SBI, HDFC, you get around 6 to 6.5 percent interest there on different tenure. At the same time, if you want a bit more profit, you can turn to small banks like AU Small Finance Bank or Jana Small Finance Bank. These banks are providing more benefits to the customers as compared to the normal banks. Interest rates in these institutions reach up to 7 to 8 percent on select tenures.

10 lakh monthly earnings

Now let’s understand the calculation of profit directly. Suppose you have deposited 10 lakh rupees. If you are getting 6 percent interest from the bank, the annual interest on Rs 10 lakh will be around Rs 60 thousand. That is, as per monthly payment, 5,000 rupees will come into your account every month. If the interest rate is 6.5 percent, the annual interest will be Rs 65 thousand and Rs 5,417 per month.

If the interest rate is 7 percent, then the annual interest will be 70 thousand rupees. With this account you will get around Rs 5,833 per month. 6,250 will be earned per month at the rate of 7.5 percent. If you get a strong return of 8 percent from small banks, the annual interest will be Rs 80 thousand. In such a situation, your earnings per month will be around Rs 6,667. All these figures are calculated on the basis of simple annual interest.

A suitable option for regular income

If your aim is to get money every month for household expenses, then you have to take special care while choosing an FD. You have to choose an FD that pays interest regularly. In this, you can easily choose monthly, quarterly, half-yearly or annual payment option as per your requirement. While the accumulated FD does not earn any interest money at all. That money is directly added to your principal amount on maturity. So, to determine the monthly income, regular interest payment option is best.

Keep these things in mind, including taxes

If you withdraw only the interest money from the investment, your principal of Rs. 10 lakhs can remain entirely in FD. Interest can be taken as income every month. You get the principal amount on maturity. However, if you break the FD prematurely, the bank’s premature withdrawal rules apply. This can have a direct impact on your profits. Another important thing is that interest earned from FD is counted in your taxable income. Your tax liability is determined according to your total income. So, while choosing an FD, the amount in hand after tax should also be calculated.