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When choosing a fixed deposit to invest in, one of the most important factors you must consider is the interest rate offered by the issuer. The interest rate is predetermined, and you can use it to calculate how much returns you would earn at the end of the tenor.

There are two main formulas that allow you to calculate the total interest receivable: simple interest and compound interest. Moreover, you can also use the ‘₹2 interest for ₹20,000 per month’ method to determine the interest receivable at the end of the investment horizon.

## Formula with an Illustration

Just like the ‘₹1 interest’ method, you can use the ‘₹2 interest for ₹20,000’ method to find out your FD returns. In other words, if you earn ₹2 interest for ₹20,000 principal amount per month, you can use this method to find the total interest receivable:

Here is the table showcasing different formulas and illustrations to find your FD returns if the initial investment that you make is ₹20,000:

 Calculation Method Formula Illustration ‘₹2 Interest for ₹20,000 Per Month’ Method With ₹2 interest on ₹100, the annual interest rate would be 2 X 12 = 24% On investing ₹20,000 for monthly payouts at a 2% interest rate, your annual interest rate would be 24%. Monthly interest receivable = 20,000 X 2/100 = ₹400 Simple Interest Method I = p × r × t   Here, I = Interest  p = Principal amount  r = Interest rate t = Investment period Assume you invest the same amount for a tenor of two years. The interest earned in two years would be 10,000 X 24/100 X 2 = ₹4,800   Monthly interest = 4,800/12 = ₹400 Compound Interest Method I = [P (1 + r/n)^n X t] – P   Here, I = Value of interest  r = Interest rate (in decimal format) n = Number of times the interest gets compounded t = Tenor If you invest ₹20,000 for the same length of tenor, compounding annually, the interest amount would be [20,000 X (1+24/100/1)^1*1] - 20,000 = ₹4,800   Monthly interest = 4,800/12 = ₹400

## ₹2 Interest for ₹20,000 Per Month

So, if you invest ₹20,000 as an initial investment in an FD providing ₹2 interest for two years, you can earn a monthly interest of ₹400. Alternatively, if you choose a compounding FD, your interest may be higher if it is compounded more than once yearly.

However, if you calculate FD interest manually, you may find the process complex and cumbersome. In addition to this, even a small manual error can cause huge variations in the end result.

Hence, it is advisable to use Bajaj Markets’s FD calculator to determine the amount of interest receivable. This online tool is not just quick but also easy to use. All you have to do is enter the principal amount, interest rate, and the tenor to determine your FD returns.

## 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.

## FAQs on How to Calculate ₹2 Interest for ₹20,000 Per Month

On an FD offering ₹2 interest for ₹20,000 at simple interest, you can calculate the total interest using this formula: I = p × r × t

Here, the total interest receivable on such an FD would be ₹38,632.

You can calculate compound interest on an FD offering ₹2 interest for ₹20,000 per month using this formula: I = [P (1 + r/n)^n X t] – P

Using an FD calculator can help you avoid any manual error in calculations. Additionally, it’s a time saving tool that provides you with accurate results.

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Earn interest up to 8.60% p.a. by investing in a Bajaj Finance Fixed Deposit | Rated CRISIL AAA/ STABLE and [ICRA]AAA(stable)    