Monthly Interest Payout for an FD of ₹8 Lakhs

Choosing the monthly interest payout option from a fixed deposit (FD) can help you generate regular income, which could be useful for managing unexpected expenses. 

 

For example, at 8% p.a. for a tenure of 5 years, the ₹8 Lakh FD interest per month  would be ₹5,333. Over the course of 5 years, you would earn a total interest of approximately ₹3.7 Lakhs.

 

However, the exact amount will depend on factors such as the issuer and tenure you choose. By comparing options and planning your investment, you can ensure a steady, assured monthly income.

The returns from an FD depend on the interest rate you lock in at the time of booking. Here is an overview of the ₹8 Lakh FD interest per month for a tenure of 5 years you could receive.

Note: The figures mentioned above are indicative. The actual returns may vary.

The monthly interest on a ₹8 Lakh fixed deposit depends on the bank or NBFC you choose and the rate offered. Here is an overview of the returns from some of the leading financial institutions for 2024. The tenure considered below is 5 years.

Note: The above-mentioned rates are subject to change at the bank or NBFCs discretion. These rates are valid as of 7th May 2024.

Below is a table showing the maturity amounts for a 8 Lakh fixed deposit interest per month of 7.70% p.a. The details are provided 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.

The bank or NBFC will deduct TDS from your interest if it is above the specified limit. Here are the conditions under which this deduction is applicable:

• If the yearly interest exceeds ₹40,000 in case of non-senior citizens

• If the yearly interest exceeds ₹50,000 in case of senior citizen investors

 

Since, the total monthly interest on a ₹8 Lakh fixed deposit is likely to exceed the above conditions, the financial institution will deduct TDS. The rate of deduction will be 10% if you have provided PAN and 20% if not. 

 

If your annual income is under the basic exemption limit, you can avoid TDS deduction. Make sure to submit Form 15G/15H to the bank or NBFC to enable this.

To know the  ₹8 Lakh fixed deposit interest per month that you can earn, you can use an FD calculator. This tool will give you an estimate of the monthly interest and the maturity amount. Here are the details you will need to use the calculator:

• Investment amount

• Tenure

• Interest rate

• Payout option

Maturity Amount Calculation Example

Let’s assume you invested ₹8 Lakhs in a fixed deposit (FD) at an interest rate of 9.40% p.a. for a period of 5 years (60 months). Here’s how you can calculate monthly interest on a ₹8 Lakh fixed deposit:

• Monthly Interest = Principal × Interest Rate / 12

• Monthly Interest = ₹8,00,000 × 9.40% / 12

• Monthly Interest = ₹75,200 / 12

• Monthly Interest = ₹6,266.67

 

The monthly interest earned on an FD of ₹8 Lakhs at 9.40% p.a. would be ₹6,266.67

 

Total Interest Earned Upon Maturity

• Total Interest Earned = Monthly Interest × Number of Months

• Total Interest Earned = ₹6,266.67 × 60

• Total Interest Earned = ₹3,76,000

 

The total interest accumulated over the 5-year tenure would amount to ₹3,76,000, and the monthly interest payout would be ₹6,266.67

Withdrawing your deposit before maturity typically incurs a penalty, which can reduce your returns. The penalty usually ranges from 0.5% to 1% of the interest, depending on the bank or NBFC. To determine the impact, you can use a penalty calculator or opt for a loan against your deposit, which may be a more affordable alternative.

FD Premature Withdrawal Example

If you invest ₹8 Lakhs in a fixed deposit with a 5-year tenure at an interest rate of 9.40% p.a. but decided to withdraw after 1 year. In this case, the interest rate applicable for that 1-year period will be reduced to 8.40% p.a. After applying a 1% penalty for early withdrawal, the final rate drops to 7.40% p.a., resulting in lower returns than expected.

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.