Monthly Interest on a ₹4 Lakh Fixed Deposit

Investing ₹4 Lakhs in a fixed deposit (FD) is a prudent and low-risk financial strategy to safeguard your capital while generating a reliable return. However, it's essential to understand that FD interest rates are subject to fluctuations over time.

 

For instance, with a 8% p.a. interest rate on an FD of ₹4 Lakhs for 5 years, you could earn as much as ₹2,666 each month. Similarly, if you book an FD for the same amount and same tenure at a rate of 9.50%, your monthly earnings will be ₹3,167. 

 

Hence, diligently monitoring the prevailing interest rates when making your investment decision can ensure optimised returns with your ₹4 Lakh fixed deposit interest.

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

Note: The monthly interest for ₹4 Lakh fixed deposit mentioned above is indicative. Your actual returns depend on the bank or NBFC's policies.

Choosing the right bank or NBFC allows you to maximise your returns. Refer to the table below to know the ₹4 Lakh FD interest per month for a tenure of 5 years across top banks and NBFCs, in 2025:

Note: The above interest rates are as of June 2024 and subject to change at the discretion of the bank or NBFC.

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

Note: The above-mentioned rates are subject to change at the bank or NBFC's discretion

Before diving into the investment process, carefully understand tax implications. According to the Income Tax Act of 1961, the following regulations apply to interest on ₹4 Lakh 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 ₹4 Lakh fixed deposit interest per month if you have not submitted your PAN card

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

• Enter the investment amount, tenure, and interest rate

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

• You will get an estimate of monthly interest for ₹4 Lakh fixed deposit

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.

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 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.