Monthly Interest on a ₹20 Lakh Fixed Deposit

Investing in an FD could be a wise choice for investors looking to earn stable and assured returns at regular intervals. With 9% interest on a ₹20 Lakh FD for 5 years, you can get monthly earnings of up to ₹15,000 and total earned interest of ₹10.77 Lakhs. 

 

Likewise, booking the same FD at a rate of 9% for 2 years will fetch you a payout of ₹15,000  every month, but the total interest earned will go down. In this case, it will be ₹3.76 Lakhs.

 

Your interest payouts depend on the FD rate, tenure and invested amount. By choosing the right terms, you can maximise profits. Compare issuers and rates and forecast your earnings to go about this smartly.

The table below calculates ₹20 Lakh Fixed Deposit interest per month for a tenure of 5 years at varying interest rates.

Being aware of the interest rates helps you choose the right tenure and calculate your monthly returns effortlessly. Compute the returns using an FD calculator before selecting an FD scheme.

 

Here is a quick overview of rates offered by various banks and NBFCs in 2025. Note that these interest rates are applicable for a tenure of 5 years.

Below is a table showing the maturity amounts with interest on a ₹20 Lakh FD at a rate of 7.50% p.a. across different tenures.

Your ₹20 Lakh FD interest per month is subject to Tax Deduction at Source (TDS). Here are the rates that apply:

• TDS is deducted at 10% if the interest earned exceeds the prescribed threshold

• For regular citizens, the limit stands at ₹40,000

• For senior citizens, the limit has been increased to ₹50,000 

• TDS is deducted at 20% if the investor has not submitted PAN details

Calculating the monthly interest on a ₹20 Lakh fixed deposit is crucial for effective investment planning. By manually using a simple formula, you can estimate your monthly returns based on the interest rate and tenure offered by the bank or NBFC.

Maturity Amount Calculation Example

Assume you invest ₹20 Lakhs in a fixed deposit at an interest rate of 7.50% p.a. for a tenure of 5 years (60 months).

• Monthly Interest Earned = ₹2,00,00,000 × 7.70% / 12

• Monthly Interest Earned = 20,00,000 × 0.075 / 12

• Monthly Interest Earned = ₹1,50,000 / 12

• Monthly Interest Earned = ₹12,500

 

Thus, the monthly interest earned on a ₹20 Lakh FD at 7.50% p.a. would be ₹12,500.

 

Total Interest Earned Upon Maturity

• Total Interest Earned = Monthly Interest × Number of Months

• Total Interest Earned = ₹12,500 × 60

• Total Interest Earned = ₹7,50,000

 

The total interest earned over the 5-year tenure would be ₹7,50,000, with a monthly payout of ₹12,500.

 

Note: Check the formula used by the bank or NBFC to get an accurate estimate. 

Banks and NBFCs have different policies for premature FD withdrawals. Most charge a penalty on interest earned or reduce the interest rate. Some may follow a 'No penalty' policy, helping you avoid losses. It’s important to check the specific terms, as they vary across financial institutions.

FD Premature Withdrawal Example

Assume you invested ₹20 Lakhs in a fixed deposit with a 4-year tenure at an interest rate of 8.20% p.a. but decided to withdraw it prematurely after 1 year. The applicable interest rate for the 1-year period would be 7.20% p.a. After applying a 1% penalty for premature withdrawal, the final interest rate is reduced to 6.20% p.a., resulting in lower-than-expected returns.

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.