If you have accumulated a substantial amount of savings, consider investing it in a fixed deposit. To fully utilise the benefits of this investment tool, you can align a short or long-term goal and choose a specific tenor. This way, at the end of the tenor, you can use the funds to finance various financial goals. 

 

With an FD, you could earn inflation-beating returns that are not market fluctuations.  Moreover, you can steadily earn from your savings over your desired tenor, with liquidity options available as per your convenience. In this case, you could enable the monthly interest payout option on an FD to receive regular returns. 

Deposit Amount

Interest Rate

Tenure

Months

At Maturity
At Maturity
Monthly
Quaterly
Half Yearly
Yearly

Investment Amount

Interest Rate

Total Interest Amount

Total Payout (Principal + Interest)

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Monthly Interest Payout for an FD of ₹1 Lakh

When investing a sum like ₹1 Lakh in an FD, you must explore the different interest earnings you could receive based on the interest rate offered. Using an FD calculator, you can estimate your potential interest earnings and total returns by filling in simple details like the principal amount, tenor, and desired interest rate. 

 

The table below shows an estimate of the monthly interest payout you would receive on a ₹1 Lakh fixed deposit across different interest rates:

Deposit Amount

Interest Rate (p.a.)

Monthly Interest Payout

₹1 Lakh

6.00%

₹500

₹1 Lakh

6.50%

₹542

₹1 Lakh

7.00%

₹583

₹1 Lakh

7.50%

₹625

₹1 Lakh

8.00%

₹667

₹1 Lakh

8.50%

₹708

₹1 Lakh

9.00%

₹750

₹1 Lakh

9.50%

₹792

₹1 Lakh

10.00%

₹833

Disclaimer: In the above example, the assumed tenor is 5 years (60 months).

Interest on ₹1 Lakh FD Offered by Banks & NBFCs

When browsing different FD issuers, you must compare the interest rates offered. Aside from this parameter, you must check the ratings assigned to them by agencies like CRISIL and CARE. Additionally, consider 5-year FDs issued by banks which are eligible for tax benefits. 

 

The table below indicates the monthly interest payout on a ₹1 Lakh fixed deposit you could earn across different banks and NBFCs for a tenor of 5 years:

Bank/NBFC/HFC

Non-Senior Citizen (p.a.)

Monthly Interest Payout

Senior Citizen (p.a.)

Monthly Interest Payout

Bajaj Finance Ltd. 

8.05%

₹671

8.30%

₹692

PNB Housing Finance Ltd. 

7.65%

₹638

7.95%

₹663

Mahindra Finance Ltd.

8.05%

₹671

8.30%

₹692

LIC Housing Finance

7.75%

₹646

8.00%

₹667

Shriram Finance

8.60%

₹717

9.10%

₹758

ICICI Bank 

7.00%

₹583

7.50%

₹625

HDFC Bank 

7.00%

₹583

7.50%

₹625

IDFC First Bank 

7.00%

₹583

7.50%

₹625

Axis Bank 

7.10%

₹592

7.60%

₹633

IndusInd Bank 

7.25%

₹604

7.75%

₹646

YES Bank 

7.25%

₹604

8.00%

₹667

Jana Small Finance Bank 

7.25%

₹604

7.75%

₹646

Kotak Mahindra Bank

6.20%

₹517

6.70%

₹558

State Bank of India

6.50%

₹542

7.50%

₹625

AU Small Finance Bank

7.25%

₹604

7.75%

₹646

Ujjivan Small Finance Bank

7.20%

₹600

7.70%

₹642

*Disclaimer: The above-mentioned rates are effective as of 11th March 2024 and are subject to change at the issuers’ discretion.

Tax Deductions at the Source

Depending on the income tax bracket you fall under, the interest you earn from an FD of ₹1 Lakh may be subject to the following conditions: 

  • If monthly interest payout does not exceed ₹40,000, it will not be taxed

  • If the interest earned exceeds ₹40,000 for a regular citizen, a TDS of 10% will be deducted

  • If the interest earned exceeds ₹50,000 for a senior citizen investors, TDS is levied at 10% 

  • If you do not submit PAN card details, TDS is deducted at 20%

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 Monthly Interest for ₹1 Lakh FD

How much interest will I get on ₹1 Lakh fixed deposit?

The monthly interest earned on a ₹1 Lakh fixed deposit depends on the prevailing interest rate offered by the bank. There is no minimum or maximum limit to the monthly interest, as it varies based on the interest rate set by the bank.

Is there a minimum and maximum cap on the monthly interest for a ₹1 Lakh fixed deposit?

No, there is no minimum or maximum cap to the monthly interest for a ₹1 Lakh fixed deposit. The monthly interest amount is determined by the interest rate offered by the bank.

Are ₹1 Lakh fixed deposits taxable?

Yes, interest earned on ₹1 Lakh fixed deposits is taxable based on your income slab. Banks deduct TDS at a rate of 10% if the interest earned exceeds ₹40,000 in a financial year.

Are there any benefits for senior citizens for the monthly interest they will get on a ₹1 Lakh FD?

Senior citizens enjoy certain benefits such as a higher TDS exemption threshold and can submit Form 15H to avoid TDS deduction if their total income is not taxable. However, the monthly interest earned on a ₹1 Lakh FD remains the same for both senior citizens and regular citizens.

What are the documents required for a ₹1 Lakh fixed deposit?

To open an FD of ₹1 Lakh, you need to provide identity proof (e.g., PAN card, passport, Aadhaar card), address proof (e.g., passport, utility bills), and signature proof (e.g., PAN card, passport). Senior citizens need to provide age proof along with Form 15H, while regular citizens need to submit Form 15G.

What are the eligibility criteria for a ₹1 Lakh fixed deposit?

To be eligible for a ₹1 Lakh fixed deposit, you must be at least 18 years old and have a PAN card. Minors can also have a fixed deposit under the guardianship of a guardian. Additionally, you must satisfy RBI-mandated KYC guidelines for identity, address, and age proof.

How to calculate FD interest on ₹1 Lakh?

You can use an online fixed deposit interest calculator to calculate the interest earned per month and the overall maturity amount on a ₹1 Lakh fixed deposit. Simply input the principal amount, tenor, and interest rate to get the interest amount. Alternatively, you can use the formula for simple interest: Interest = (Principal × Rate × Time) / 100.

Is there a penalty for withdrawing the ₹1 Lakh fixed deposit before maturity?

The penalty for premature withdrawal of a ₹1 Lakh fixed deposit depends on the terms and conditions set by the bank or financial institution. Typically, there may be a penalty in the form of reduced interest rates or forfeiture of a portion of the interest earned.

What happens if I do not renew my ₹1 Lakh fixed deposit after maturity?

If you do not renew your ₹1 Lakh fixed deposit after maturity, the funds, along with the interest earned, will be transferred to your linked savings or current account. Alternatively, some banks may automatically renew the FD for the same tenor at prevailing interest rates unless instructed otherwise.

Is my ₹1 Lakh fixed deposit amount insured?

The deposit insurance coverage provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC) currently insures deposits up to ₹5 lakh per depositor in a bank. Therefore, your ₹1 Lakh fixed deposit is fully insured by DICGC, ensuring the safety of your principal amount in case of bank failure.

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