A fixed deposit (FD) is a fixed income instrument that allows depositors to earn a lucrative rate of interest depending on the amount of capital invested and the tenure for which it has been invested. These are usually offered by various financial institutions in order to raise funds. So if depositors have a surplus amount of money piled up in their savings account, they can invest it on fixed deposit (FD).
Fixed deposits can either offer interest income every month or the interest income earned is accrued and offered to the depositor at the end of the term. The option of receiving monthly interest income from fixed deposits is quite popular among depositors.
Here are some of the reasons:
Easy to set up a monthly income fixed deposit account
It is convenient to invest in a fixed deposit that would offer a monthly income. Depositors need to carry cheques for the requisite amount along with the necessary documents to open a fixed deposit. This is a hassle-free process.
Overcomes the problem with regular fixed deposit
The problem with regular fixed deposits is that you are not allowed to withdraw from the invested capital before the maturation date that is before the tenure ends. This limits an investor from receiving any kind of benefit from the invested amount until it matures.
Fixed deposits that offer a monthly income would ensure that depositors get access to interest income earned from the invested amount. The interest income is credited directly to the investor’s account.
Online crediting of earned interest
In this fd process, the due income at the end of every month is transferred directly to the depositor’s account. This turns out to be extremely convenient for the depositor.
No investment of time or effort
There is no need to put any kind of effort or invest any time in this whole procedure. Depositors just need to open a monthly income fixed deposit account, make the investment and leave the rest to the financial institution.
A boon for senior citizens
After having to work for all these years now the senior citizens of the nation can take advantage of this scheme with even highest fd rates than others on monthly income fixed deposits. All they have to do is to invest in fixed deposits and earn their monthly income.
Senior citizens find this to be extremely empowering as they can continue to earn a steady income from their deposits.
Stable source of monthly income
There are other options that can offer a fixed monthly income. However, fixed deposits are stable. They are ranked by rating agencies. Highly rated fixed deposits turn out to be a stable source of income for depositors.
Fixed deposits offering a monthly income are a crucial part of a depositor’s financial portfolio as they offered steady and assured income.
Hence this fd process can be considered as the best investment option to get a monthly income since it is safe and promises guaranteed returns at the end of every month.