Monthly Interest on a ₹1 Lakh Fixed Deposit

If you have accumulated a substantial amount of savings, consider investing it in a fixed deposit. To fully utilise the benefits of this investment tool, you can align a short or long-term goal and choose a specific tenure. 

 

For example, for a tenure of 5 years, the ₹1 Lakh FD interest per month can go up to ₹833 at an interest of 10% with an annual interest earning of ₹61,051. Similarly, opting a tenure of 3 years for the same FD amount at 10% will generate a monthly interest payout of ₹833, but the interest earned per annum will be ₹33,100. Shorter timelines will lead to earning lower interest. 

You can steadily earn from your savings over your desired tenure, with liquidity options available as per your convenience. In this case, you could enable the monthly interest for a ₹1 Lakh fixed deposit payout option to receive regular returns.

The table below shows an estimate of the ₹1 Lakh FD interest per month. In this case, the assumed tenure is 5 years across different interest rates:

Note: The ₹1 Lakh fixed deposit interest per month payouts mentioned above are indicative. Your actual returns will vary depending on the bank or NBFC’s policies.

When comparing FDs offered by different financial institutions, it is important to evaluate the interest rates. Aside from this parameter, you must check the ratings assigned to them by agencies like CRISIL and CARE.  

 

The table below indicates the monthly interest for ₹1 Lakh in bank FDs that you could earn in 2024 across different banks and NBFCs for a tenure of 5 years:

Note: The ₹1 Lakh FD interest rates mentioned are subject to change at the bank or NBFC’s discretion. These rates are valid as of 5th May 2024.

Below is a table showing the maturity amounts for your investment of ₹1 Lakh at an interest rate of 8.47% p.a. Here's a breakdown for different tenures:

Note: The above table is for illustrative purposes only. Your actual returns may vary depending on the bank or NBFC’s policies.

Depending on the income tax bracket you fall under, the monthly interest on an FD of ₹1 Lakh fixed deposit may be subject to the below conditions:

• If the ₹1 Lakh fixed deposit monthly interest payout does not exceed ₹40,000, it will not be taxed.

• If the interest earned exceeds ₹40,000 for a regular citizen, a TDS of 10% will apply

• If the interest earned exceeds ₹50,000 for a senior citizen, TDS is levied at 10% 

• If you do not submit your PAN details, TDS is deducted at 20%

You can use an online FD interest calculator to compute the potential fixed deposit interest rates for ₹1 Lakh. Input the following details into the tool:

• Principal amount

• Investment tenure

• Interest rate

 

Alternatively, you could use this formula to calculate the FD interest for ₹1 Lakh earned:

 

Monthly Interest Earned = Principal × Interest Rate / 12

 

Maturity Amount Calculation Example

Let’s assume that you invested ₹1,00,000 in an FD at an interest rate of 7% p.a. for a tenure of 5 years. Here's how you can manually calculate the monthly interest on ₹1 Lakh earned.

• Monthly Interest Earned = ₹1,00,000 × 7% / 12

• Monthly Interest Earned = ₹1,00,000 × 0.07 / 12

• Monthly Interest Earned = ₹7,000 / 12

• Monthly Interest Earned = ₹583.33

 

So, the ₹1 Lakh FD monthly interest earned at 7% p.a. would be approximately ₹583.33.

 

Interest Earned Upon Maturity

 

Interest Earned On Maturity = (Principal x Interest Rate / Months in a year) x Months in 5 years 

• Interest Earned Upon Maturity = ₹1,00,000 × 7% / 12(100000 x 7%/12) x 60

• Interest Earned Upon Maturity = ₹583.33 x 60

• Interest Earned Upon Maturity = ₹34,999.80

 

The total fixed deposit interest for ₹1 Lakh at the end of the 5-year tenure would be ₹34,999.80

 

Note: Check the formula used by the bank or NBFC to get an accurate estimate.

Premature withdrawal allows you to withdraw your FD before maturity, often for emergencies. However, it usually comes with penalties such as reduced interest rates or a withdrawal fee, depending on the bank or NBFC’s terms. The interest rate applied will be based on the completed tenure at the time of withdrawal.

FD Premature Withdrawal Example

You have invested ₹1 Lakh in an FD at an interest rate of 7.00% p.a. for 3 years but decide to prematurely withdraw the amount after 1 year. In this case, the effective interest rate will be 6.80% p.a., which is the applicable rate for this tenure. The premature withdrawal penalty of 1% will be applied on this rate.   

Note: The figures above are for illustration purposes only. The actual penalty charges may vary depending on the bank or NBFC’s policies.

The information provided by BFDL is related to the rates provided by Banks and Deposit taking NBFCs as available from public domain and under no circumstances is intended to be source of advice or recommendation of any financial investment advice or endorsement of any sort. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers and use of such information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. Display of any intellectual property along with the related product information does not imply BFDL’s partnership with the owner of the intellectual property of such products and is solely for the purpose of information, unless otherwise provided by BFDL.