Regular Income from Your Savings

A **Non-Cumulative Fixed Deposit**, often called an FD Monthly Income Scheme, is designed for investors who need regular cash flow rather than a lump sum at maturity.

Instead of re-investing the interest (compounding), the bank pays the interest directly into your savings account at a frequency you choose: **Monthly, Quarterly, or Yearly**.

Who is this for?

This is the gold standard for **Retirees and Pensioners**. By depositing a retirement corpus (e.g., ₹50 Lakhs), you can generate a steady "salary" (interest payout) to cover household expenses without touching the principal amount.

The Trade-Off: Growth vs. Income

• No Compounding: Since you withdraw the interest, your money does not grow. The maturity amount will be exactly the same as your initial deposit.
• Interest Rates: Payout FDs typically offer the same interest rate as cumulative FDs, but the effective yield is lower because you miss out on the "interest-on-interest" effect.
• Senior Citizen Bonus: Most Indian banks offer an additional **0.50%** interest rate for citizens above 60 years, increasing your monthly paycheck.