What are the benefits of opting for a monthly interest on an FD of ₹25 Lakhs?

Some of the key benefits of opting for monthly interest payouts on a fixed deposit (FD) of ₹25 lakhs are as follows:

1. Regular Income: Monthly interest payouts provide liquidity in terms of regular interest income every month to the depositor. This helps meet regular income needs.
2. Reinvestment and Wealth Creation Opportunities: The monthly interest received can be reinvested to earn additional returns. This provides investors with the opportunity to allocate funds into other income-generating or growth-oriented investments.
3. Flexibility: As the interest amount is available every month, there is flexibility to use the payouts for various financial requirements that may arise at different times during the FD tenure.
4. Higher Total Returns: Reinvesting the monthly interest payouts can potentially enhance total returns by leveraging the power of compounding over an extended period.

Thus, monthly payouts provide liquidity, flexibility and better cash flow management compared to cumulative FDs where interest is accrued over the tenure.