Monthly Interest for a Fixed Deposit of ₹4 Lakhs

Investing ₹4 Lakhs in a fixed deposit offers a reliable way to generate steady monthly income while keeping your capital secure. By selecting the appropriate interest rate and investment tenure, you can ensure consistent payouts that support your financial needs. Explore various interest rates and tenures to maximise your returns and achieve your financial objectives.

Check the table below to understand how the ₹4 Lakh FD’s interest per month varies for different rates. The tenure assumed is 5 years.

Choosing the right bank or NBFC allows you to maximise your returns. Refer to the table below to know the ₹4 Lakh FD’s interest per month for a tenure of 5 years across top banks and NBFCs.

Here’s a table detailing the maturity amounts for a ₹4 Lakh FD at an interest rate of 7.70% p.a., with a breakdown across different tenures:

Before diving into the investment process, carefully understand tax implications. According to the Income Tax Act of 1961, the following regulations apply to FD investments:

• Financial institutions deduct TDS at 10% if your annual interest income is more than ₹40,000 

• If you are a senior citizen, the tax exemption limit is ₹50,000 in a financial year

• You can submit Form 15G or 15H to the bank or NBFC and avoid tax deductions if you fall below the basic income tax exemption limit

• If you have furnished your PAN details, 10% TDS will be deducted

• A TDS at 20% will be applicable on the interest per month on an FD of ₹4 Lakhs if you have not submitted your PAN card

You can use the calculator provided above to compute how much you can earn from FD interest. Follow these simple steps to calculate interest per month on an FD of ₹4 Lakhs:

• Enter the investment amount, tenure, and interest rate

• Choose the ‘Monthly’ option under the ‘Interest Payout’ category

• You will get an estimate of monthly payouts

Maturity Amount Calculation Example

Here’s how you can calculate the monthly interest and total maturity amount if you invest ₹4 Lakhs in a fixed deposit at an interest rate of 7.40% p.a. for a period of 3 years:

• Monthly Interest = Principal × Interest Rate / 12

• Monthly Interest = ₹4,00,000 × 7.40% / 12

• Monthly Interest = ₹29,600 / 12

• Monthly Interest = ₹2,466.67

 

The monthly interest earned on this FD would be ₹2,466.67

 

Interest Earned Upon Maturity

• Total Interest = Monthly Interest × Number of Months

• Total Interest = ₹2,466.67 × 36

• Total Interest = ₹88,800.12

 

The total interest accumulated over the 3-year period would be ₹88,800.12

 

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

Premature withdrawal of a fixed deposit can reduce your returns as banks and NBFCs apply a lower interest rate than the original. Additionally, a penalty of 0.50% to 1% may be imposed on the withdrawn amount. These factors combine to lower the total interest earned, impacting your overall returns.

FD Premature Withdrawal Example

If you invest ₹4 Lakhs in an FD with a 4-year tenure at 8.50% p.a. but decide to withdraw after 1 year, the interest rate will drop to 7.50% p.a. With a 1% penalty for early withdrawal, the final interest rate decreases to 6.50% p.a., leading to lower-than-expected returns.

The information provided by BFDL is related to the rates provided by Banks and Deposit taking NBFCs and under no circumstances is intended to be source of advice or recommending 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 the 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 such 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.