When it comes to safe investments, there is no doubt about the fact that a fixed deposit is a very attractive option since it provides safety coupled with steady growth. Some fixed deposits also go so far as to offer income tax benefits on the amounts invested in them each year. However, there are times when the people who invest in fixed deposits need to maintain constant access to that investment so as to be able to augment their monthly income. Taking these needs into consideration some banks offer specific fixed deposits that are known as monthly income plans and help augment their monthly income.
What a monthly income fixed deposit is basically a fixed deposit that can be created and earns an interest in much the same way a regular fixed deposit does with a few differences. The being that with a monthly income plan the investors either have access to the amount deposited or are paid the interest earned on a monthly basis. Some banks even let depositors withdraw the interest every month from regular fixed deposits at discounted interest rates. The monthly income plans are generally linked to a bank account and the interest earned is credited into that account.
While the features of these accounts can vary from one bank to another, a general set of features that you may see with these accounts are: