Turning ₹50 lakh into a monthly income for two
At an example senior rate of 7.5%, ₹50 lakh in monthly payout FDs gives ₹31,250 a month, ₹15,625 from each of their shares. That covers their ₹30,000 with a little to spare. The risk is renewal. If rates are lower when the FDs come up, say 6.5%, the same ₹50 lakh pays only ₹27,083 a month, while prices keep rising. FDs of different tenures mean they don't all renew at a low rate together.
Each of them is a separate depositor, so DICGC covers ₹5 lakh of Gopal-ji's and ₹5 lakh of Kamla-ji's in every bank. Five banks with ₹5 lakh in each name keep the whole ₹50 lakh insured. The split also keeps TDS away, as each FD earns ₹37,500 a year, under the ₹1 lakh limit for seniors. At 7.5%, TDS starts only when more than about ₹13,33,333 sits in one name at one bank. Their ₹1,87,500 of interest each is still income, but with nothing else coming in, their tax under the new regime works out to nil.
Frequently asked questions
What is the monthly interest on a ₹50 lakh FD?
About ₹29,167 a month at 7%, which is ₹3,50,000 a year. At 7.5% it is ₹31,250 a month. Quarterly payout at 7% gives ₹87,500. Banks often credit slightly less on monthly payout because they use a discounted rate.
How much does a ₹60 lakh FD pay per month?
At the same 7% example rate, ₹60 lakh pays about ₹35,000 a month. Every extra ₹10 lakh at 7% adds roughly ₹5,833 a month.
Will ₹50 lakh in an FD become ₹1 crore?
At 7% compounded quarterly, it reaches about ₹1,00,07,987 in 10 years if no interest is taken out. In 7 years it is ₹81,27,064. Tax is due on the interest every year, so after tax it takes longer.
Is it safe to keep a ₹50 lakh FD in one bank?
Deposit insurance covers only ₹5 lakh per depositor per bank, so most of it would be uncovered. Bank failures are rare, but when a bank gets into trouble, withdrawals can be frozen. Spreading it over banks, and over both spouses' names when the money really belongs to both, keeps much more of it insured.
