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.

₹2 Interest for ₹2 Lakhs Per Month: Calculation Methods

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,

  • I = Interest amount
  • p = Principal amount
  • r = Interest rate
  • t = Investment tenor

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,

  • P = Principal amount
  • R = Rate of interest 
  • n = Number of periods 
  • t = Time period

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

₹2 Interest for ₹2 Lakhs Per Month

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 online FD calculator on $$BrandName$$%.

Disclaimer

The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort. 

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of 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. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. 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. 

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FAQs on How to Calculate ₹2 Interest for ₹2 Lakhs Per Month

How can I calculate interest per month?

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.

Will an FD interest calculator give the same results as manual calculation?

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.

Can I use the interest calculator to estimate the returns from post office FDs?

Yes, you can and several websites provide this facility. Alternatively, you can use an interest calculator to perform these calculations.

Are monthly interest payments good for FDs?

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.

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