1. What is Monthly Payout FD Interest?

Monthly Payout Fixed Deposit Interest is a financial arrangement where instead of receiving the interest at maturity, the investor receives a fixed monthly income based on the principal amount and agreed interest rate.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( P \) — Principal amount (currency units)
• \( R \) — Annual interest rate (%)

Explanation: The formula calculates the monthly interest payout by converting the annual rate to a monthly rate and applying it to the principal amount.

3. Importance of Monthly Payout Calculation

Details: Calculating monthly payouts helps investors plan their cash flow, compare different FD schemes, and make informed investment decisions for regular income needs.

4. Using the Calculator

Tips: Enter the principal amount in currency units and the annual interest rate as a percentage. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is the monthly payout fixed throughout the FD tenure?
A: Yes, in a standard monthly payout FD scheme, the payout amount remains constant throughout the tenure.

Q2: Does the principal amount reduce with monthly payouts?
A: No, the principal amount remains intact in a monthly payout FD. You receive only the interest portion each month.

Q3: Are monthly payouts taxable?
A: Yes, the interest income from FDs is taxable as per your income tax slab in most jurisdictions.

Q4: Can I withdraw my principal before maturity?
A: Most banks allow premature withdrawal, but usually with a penalty or reduced interest rate.

Q5: How does compounding work in monthly payout FDs?
A: In monthly payout FDs, interest is typically calculated quarterly but paid out monthly, so there's no compounding effect on the payouts.