1. What is the Monthly Payout FD Calculator?

The Monthly Payout FD Calculator estimates the monthly interest payout from a fixed deposit investment. It helps investors plan their regular income from fixed deposit investments.

2. How Does the Calculator Work?

The calculator uses the monthly payout formula:

Where:

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

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

3. Importance of Monthly Payout Calculation

Details: Calculating monthly payouts helps investors understand their regular income stream from fixed deposits, enabling better financial planning and budgeting.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is a monthly payout fixed deposit?
A: A monthly payout FD is a fixed deposit scheme where the interest earned is paid out to the investor every month instead of at maturity.

Q2: How is monthly interest calculated on FD?
A: Monthly interest is calculated by dividing the annual interest rate by 12 and applying it to the principal amount.

Q3: Are monthly payout FDs better than cumulative FDs?
A: Monthly payout FDs provide regular income but typically offer slightly lower returns than cumulative FDs where interest is compounded.

Q4: Is the monthly payout amount fixed throughout the tenure?
A: Yes, for a fixed deposit with a constant interest rate, the monthly payout amount remains the same throughout the tenure.

Q5: Are there any tax implications on monthly payouts?
A: Yes, the monthly interest income is taxable as per the investor's income tax slab in the year it is received.