Fixed deposits (FDs) continue to be one of the most trusted savings options in India. While stock markets and mutual funds can be unpredictable, FDs give assured returns with zero risk. In 2025, Indian Bank has introduced an FD scheme that has been gaining attention an investment of ₹1.5 lakh can give a monthly return of ₹8,858 under a special income option. Let’s break down how this works and whether it is the right choice for you.
How the Scheme Works
Indian Bank’s FD plan is structured under its “Monthly Income Scheme” option. Unlike traditional FDs where the interest is paid at maturity, this plan allows depositors to receive interest payouts every month. This is ideal for retirees, homemakers, or anyone seeking a fixed income stream without touching the principal amount.
Investment and Returns Calculation
For an investment of ₹1.5 lakh, the monthly payout of ₹8,858 is based on the applicable interest rate. The scheme works as a fixed income plan where the bank credits the monthly return directly to the depositor’s account.
Here’s an approximate calculation for better understanding:
| Investment Amount | FD Type | Tenure | Interest Rate | Monthly Payout |
|---|---|---|---|---|
| ₹1,50,000 | Monthly Income FD | 5 years | 7.05% – 7.25% (approx.) | ₹8,858 |
(Note: The figures above are based on standard Indian Bank FD rates as of 2025 and can vary depending on customer category senior citizens may get slightly higher returns.)
Who Should Invest in This Scheme?
This FD scheme is particularly useful for individuals who want a regular source of income rather than waiting for the maturity period. Senior citizens, pensioners, and homemakers often prefer such plans because they offer predictable monthly cash flow. Even salaried professionals can use it as a side income stream.
Benefits of the Scheme
The biggest advantage is stability your capital remains safe while the interest provides monthly earnings. Unlike market-linked investments, there is no risk of loss. Additionally, Indian Bank offers higher interest rates for senior citizens, further improving the returns.
Things to Keep in Mind
While the scheme looks attractive, investors must note that FD interest is taxable as per income tax rules. If your annual interest income exceeds the exempt limit, TDS (Tax Deducted at Source) may apply. Therefore, it is important to calculate net returns after taxes.
Conclusion
Indian Bank’s Monthly Income FD Scheme is a reliable investment plan for those who prefer safety and steady returns. With a deposit of ₹1.5 lakh, you can expect to earn a monthly income of around ₹8,858, making it an excellent choice for retirees and conservative investors. Though taxation reduces the effective return, the security and regular payouts make it one of the most dependable options in 2025.
