Start with the desired monthly rupee return, plug in rate and tenure, and estimate the principal or payout frequency precisely.
Last updated on: March 23, 2026
The return on investment or ROI is extremely crucial while making an investment decision. For instruments like FDs, which are chosen for their assured returns, this is especially important. The interest rate is what signifies the returns you can expect to earn from FDs.
To understand how the interest is calculated per month, you can use the ₹2 interest for ₹2 Lakh method. This provides a simplified take on interest calculation, and whichever way you calculate it, the outcome is the same.
The three most commonly used methods are the simple interest, compound interest, and equation. Keep reading to know more about the ₹2 interest for ₹2 Lakh per month method.
In the ₹2 interest for ₹2 Lakhs method, the ₹2 interest for the ₹2 Lakhs invested or deposited is considered, effectively generating a return of 2% per month. For further calculations, the rate of return is fixed at 2% for ₹2 Lakhs.
Here are the three methods you can use to estimate the monthly earnings for ₹2 interest for ₹2 Lakhs.
| Calculation Method | Formula | Illustration |
|---|---|---|
‘₹2 interest for ₹2 Lakhs per month’ Method |
An interest of ₹2 per month denotes an earning of ₹2 per ₹100. Here, the yearly interest rate is 2 x 12 = 24% So, the monthly interest payout = Invested amount x 2/100 |
To calculate ₹2 interest for ₹2 Lakhs per month: Monthly interest payout = 2,00,000 * 2/100 = ₹4,000 The total interest earnings on a yearly basis would be: ₹48,000. |
Simple Interest |
I = p × r × t Here,
|
To calculate the yearly interest payout: 2,00,000 * 24/100 * 1 = ₹48,000 To calculate the monthly interest: 48,000 / 12 = ₹4,000 |
Compound Interest |
[P*(1 + R)^nt] - P Here,
|
To calculate the ₹2 interest for ₹2 Lakhs: [2,00,000 X (1+24/100)^1*1] - 1,00,000 = ₹48,000 Monthly interest payout: 48,000 / 12 = ₹4,000 |
The calculation of ₹2 interest for ₹2 lakhs per month demonstrated that regardless of the calculation method used, the interest is ₹4,000. This technique can help you arrive at the exact value of FD interest you are due to receive each month.
Once the interest calculation concept is clear, you can easily compare and weigh FD schemes and returns. On the Bajaj Markets platform, you can also choose from several FD offerings from leading issuers and start your savings journey right away.
Bear in mind that with manual computation, there is room for error. To avoid a disruption in your finances arising from miscalculations, use the Fixed Deposit interest calculator on Bajaj Markets.
Reviewer
You can use any of the interest calculation methods, like equation, simple interest, and compound interest. If you know the rate of interest you will receive, the simple interest method is extremely simple.
For example, say you are depositing ₹1 Lakh for 5 years. Say you chose a lender providing 6% interest. Using the simple interest formula: (Principal * Rate * Time) / 100, the yearly interest payout is 1,00,000 * 6/100 * 1 = ₹6,000. The monthly interest payout is: 6000 / 12 = ₹500.
Yes, interest calculators and manual calculation yield similar results. However, it is important to consider annual and bi-annual compounding. Interest which is compounded twice a year will be slightly higher.
Yes, you can and several websites provide this facility. Alternatively, you can use an interest calculator to perform these calculations.
An FD paying you monthly returns is an assured source of income. The predetermined interest rate leads to a steady payout, allowing you to meet planned expenses. However, FDs with annual interest payments may yield higher returns.