Calculate ₹2 Monthly Interest for ₹1 Lakh FD

Learn how to calculate monthly interest on a ₹1 lakh fixed deposit using simple and compound interest methods, and estimate the returns you can earn from your FD investment.

Last updated on: Sep 15, 2026

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Fixed deposits are favoured investments for a reason. The interest income is fixed and regular and, in most cases, higher than the interest earned on savings accounts. However, interest calculations differ based on monthly, quarterly, half-yearly, and annual payout frequencies.

For investors, a solid understanding of fixed deposit interest calculation is useful. It allows you to compare returns across FD tenors, interest rates, and payout options. For monthly interest payouts, you can calculate returns using three methods.

These are the simple interest, compound interest, and equation methods. Each formula can be used to arrive at the same monthly interest payout for the same investment amount. However, interest may also be calculated on a quarterly, half-yearly, or annual basis.

Learn more about interest calculations with an example that illustrates ₹2 interest on ₹1 lakh per month from an FD investment.

Calculation: ₹2 Interest for ₹1 Lakh in an FD

To understand how FD interest is calculated, it is useful to use the ₹2 interest for ₹1 lakh method. This example assumes that your investment generates a return of 2% per month.

If you are wondering how to calculate ₹2 interest on ₹1 lakh, the following methods can help you estimate the monthly earnings.

Calculation Method	Formula	Illustration
‘₹2 Interest for ₹1 Lakh Per Month’ Method	₹2 interest per month indicates an interest earning of ₹2 on ₹100 invested in an FD. Yearly interest rate: 2 × 12 = 24%	This 2% return per month helps you calculate ₹2 interest on ₹1 lakh per month as follows: Monthly interest payout = 1,00,000 × 2/100 = ₹2,000 This makes the total annual interest earnings on a ₹1 lakh FD ₹24,000.
Simple Interest Method	The formula to calculate simple interest is: (Principal × Rate × Time) / 100	Using the same figures from the example above, the annual interest payout can be calculated as: 1,00,000 × 24/100 × 1 = ₹24,000 Monthly interest earned = 24,000 / 12 = ₹2,000
Compound Interest Method	The formula is: [P × (1 + R)^nt] - P Where: P = Principal amount R = Rate of interest n = Number of compounding periods t = Time period	In this example, interest is assumed to be compounded annually. To calculate ₹2 interest on ₹1 lakh per month in an FD, apply the formula: [1,00,000 × (1 + 24/100)^1×1] - 1,00,000 = ₹24,000 Monthly interest payout = 24,000 / 12 = ₹2,000

Calculation Method

Formula

Illustration

‘₹2 Interest for ₹1 Lakh Per Month’ Method

₹2 interest per month indicates an interest earning of ₹2 on ₹100 invested in an FD.

Yearly interest rate: 2 × 12 = 24%

This 2% return per month helps you calculate ₹2 interest on ₹1 lakh per month as follows:

Monthly interest payout = 1,00,000 × 2/100 = ₹2,000
This makes the total annual interest earnings on a ₹1 lakh FD ₹24,000.

Simple Interest Method

The formula to calculate simple interest is:

(Principal × Rate × Time) / 100

Using the same figures from the example above, the annual interest payout can be calculated as:

1,00,000 × 24/100 × 1 = ₹24,000
Monthly interest earned = 24,000 / 12 = ₹2,000

Compound Interest Method

The formula is:

[P × (1 + R)^nt] - P
Where:
P = Principal amount
R = Rate of interest
n = Number of compounding periods
t = Time period

In this example, interest is assumed to be compounded annually.

To calculate ₹2 interest on ₹1 lakh per month in an FD, apply the formula:

[1,00,000 × (1 + 24/100)^1×1] - 1,00,000 = ₹24,000

Monthly interest payout = 24,000 / 12 = ₹2,000

The calculation of compound interest is more layered, as it takes into account the number of times the interest is compounded. This amount is then added to the initial principal, generating higher interest.

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₹2 Interest for ₹1 Lakh Invested in an FD

The total monthly interest you can earn from a ₹1 lakh FD generating ₹2 interest on ₹1 lakh per month is ₹2,000, irrespective of the calculation method used. This approach can help you estimate your monthly FD earnings with ease.

If you are comparing multiple FD plans with different tenors and fixed deposit interest rates, calculating returns manually can be time-consuming. To simplify fixed deposit interest calculation, you can use online FD calculators. The Bajaj Markets Fixed Deposit Interest Calculator is one such tool.

It helps you estimate returns quickly and accurately. Simply enter your investment amount, select the tenure, and choose the applicable interest rate. You can also compare ₹1 lakh FD returns across different FD options on Bajaj Markets and choose a suitable investment.

Disclaimer

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.

Sajhyadri C

Financial Content Specialist

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FAQs on How to Calculate ₹2 Interest for ₹1 Lakh Per Month

How much is the interest if FD interest is compounded twice in a year?

For a ₹1 lakh FD earning ₹2 interest per month with a tenure of one year, the interest amount works out to ₹25,440 when interest is compounded half-yearly.

What percentage is ₹2 interest per month?

An interest of ₹2 per month on ₹100 invested translates to 2% per month or 24% per annum.

Do all the interest calculation methods yield the same returns?

Yes, the calculation methods generally produce the same result for this illustration. However, returns may vary under the compound interest method depending on the compounding frequency.

What is the advantage of opting for monthly interest payouts?

Monthly interest payouts can provide a regular income stream from your FD investment. This feature is commonly used in an FD monthly income scheme, making it easier to manage recurring expenses or short-term financial goals.