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Maturity Amount
₹12,64,264
Interest Earned
₹2,64,264
Deposit Amount
₹10,00,000
ROI
9.40%
p.a.
Maturity Month
Feb 2028
When investing in an FD, issuers offer various interest payout intervals, such as monthly, quarterly, and annual payouts. On choosing a monthly interest payout option, you will receive monthly returns that you could use to pay off certain expenses.
To understand this better, here is an example. If you earn 7% interest on a fixed deposit of ₹2 Lakhs for a tenure of 5 years, you can get monthly interest of approximately ₹1,166 generating ₹80,510 as total interest amount. Similarly, for a 3-year tenure at a 7% interest rate, a ₹2 Lakh FD will generate ₹1,166 in monthly interest, but in this case the total interest earned will be ₹45,000. As observed, the total interest income decreases when a shorter tenure is selected.
Hence, before you invest, compare your returns across different rates, tenures, and issuers to choose the one that offers the most lucrative earnings.
This table shows an estimate of the monthly interest on ₹2 Lakhs in bank FDs over a tenure of 5 years:
| Deposit Amount | Interest Rate (p.a.) | Monthly Interest Payout |
|---|---|---|
₹2 Lakhs |
6.00% |
₹1,000 |
₹2 Lakhs |
6.50% |
₹1,083 |
₹2 Lakhs |
7.00% |
₹1,166 |
₹2 Lakhs |
7.50% |
₹1,250 |
₹2 Lakhs |
8.00% |
₹1,333 |
₹2 Lakhs |
8.50% |
₹1,416 |
₹2 Lakhs |
9.00% |
₹1,500 |
₹2 Lakhs |
9.50% |
₹1,583 |
₹2 Lakhs |
10.00% |
₹1,666 |
Note: The monthly interest payouts mentioned above are indicative. Your actual returns will vary depending on the bank or NBFCs policies.
Check the rates offered and the monthly payouts you may receive for a ₹2 Lakh FD for 5 years in 2026:
| Bank/NBFC | Non-Senior Citizen (p.a.) | Monthly Payout | Senior Citizen (p.a.) | Monthly Payout |
|---|---|---|---|---|
Bajaj Finance |
6.95% |
₹1,158.33 |
7.30% |
₹1,216.67 |
Shriram Finance |
7.65% |
₹1,275.00 |
8.15% |
₹1,358.33 |
Mahindra Finance |
7.00% |
₹1,166.67 |
7.25% |
₹1,208.33 |
PNB Housing Finance |
7.10% |
₹1,183.33 |
7.35% |
₹1,225.00 |
Ujjivan SFB |
7.45% |
₹1,241.67 |
7.95% |
₹1,325.00 |
Yes Bank |
7.00% |
₹1,166.67 |
7.75% |
₹1,291.67 |
The table below outlines the maturity amounts for a ₹2 Lakh FD at an interest rate of 7.75% p.a., along with details for various tenures.
| Tenure | Yearly Payout |
|---|---|
1 Year (12 Months) |
₹2,15,500 |
2 Years (24 Months) |
₹2,32,201 |
3 Years (36 Months) |
₹2,50,197 |
4 Years (48 Months) |
₹2,69,587 |
5 Years (60 Months) |
₹2,90,480 |
Note: The figures above are for illustration purposes only. Actual interest rates and payouts may vary across different banks and NBFCs.
The interest you earn will be taxed if it exceeds the limits mentioned. Banks and NBFCs will deduct TDS from your interest on a fixed deposit of ₹2 Lakhs as per the following conditions:
TDS is applicable if the monthly interest payout exceeds ₹40,000 for a regular citizen
TDS is deducted at ₹50,000 for senior citizens
TDS is deducted at 10% if PAN details are furnished and 20% if not
By using an online FD interest calculator, you can compute the interest on an FD of ₹2 Lakhs for 1 year and other tenures. Input these details into the tool:
Investment tenure
Interest rate
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 = ₹2,00,000 × 6.70% / 12
Monthly Interest Earned = ₹13,400 / 12
Monthly Interest Earned = ₹1,116.67
The monthly interest earned on a ₹2 Lakh FD at 6.70% p.a. would be ₹1,116.67
Total Interest Earned Upon Maturity
Total Interest = Monthly Interest × Number of Months
Total Interest = ₹1,116.67 × 36
Total Interest = ₹40,200.12
The total interest earned over the 3-year tenure would be ₹40,200, with a monthly payout of ₹1,116.67
Note: Check the formula used by the bank or NBFC to get an accurate estimate.
Premature withdrawal of a fixed deposit allows you to access your funds before the maturity date, but it typically comes with penalties. Banks and NBFCs may reduce the interest rate from the originally agreed-upon rate and charge a small penalty fee. These factors combined can significantly lower your overall returns.
You invest ₹2 Lakhs in a fixed deposit at an interest rate of 8% p.a. for a 2-year tenure. However, you decide to withdraw prematurely after 1 year and the interest rate for the 1-year period is 7.20% p.a. After applying a 1% penalty for early withdrawal, the final interest rate would be reduced to 6.20% p.a., leading to lower returns than initially expected.
| Parameter | Details |
|---|---|
Principal Amount Invested |
₹2,00,000 |
Maturity After 3 Year |
₹2,33,280 |
Interest Rate at the Time of Booking |
8.00% p.a. |
Effective Interest Rate for 1 Year Tenure |
7.20% p.a. |
Premature Withdrawal Penalty Rate |
1% p.a. |
Final Interest Rate |
6.20% p.a. |
Final Amount Payable |
₹2,12,400 |
Note: The figures above are for illustration purposes only. The actual penalty charges may vary depending on the bank or NBFC’s policies.
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.
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There is no cap on the interest you can receive. It depends on the fixed deposit interest rate that an issuer decides. Issuers decide the rate depending on several factors, such as repo rate, internal policies, and investment terms.
Yes, generally, longer tenors yield higher interest rates for the same principal amount. So, the interest on an FD of ₹2 Lakhs for 1 year will be lower than one with a tenor of 2 or more years.
This is applicable when the annual interest from your FD of ₹2 Lakhs exceeds the threshold of ₹40,000 or ₹50,000 in the case of senior citizens. The issuer deducts TDS before crediting the interest to your account.
You will need to provide identity proof (such as a PAN card or an Aadhaar card), address proof (like a passport or utility bill), and other KYC documents. However, this varies depending on the issuer.
Most issuers allow individuals aged 18 and above with a PAN card and entities, such as HUFs, to invest in a fixed deposit. Minors can also open FD accounts, provided they do so with a guardian. However, it depends on the issuers.
You can calculate the monthly interest on a fixed deposit of ₹2 Lakhs using an online FD calculator or this formula: M = P + P {(1 + i/100)^t – 1}. Here, M is the maturity amount, P is the principal amount, i is the rate of interest, and t is the tenor.
Penalties for premature withdrawal vary depending on the terms set by the bank or issuer. Typically, such withdrawals incur penalties in the form of reduced interest earnings.
If you choose not to renew your fixed deposit, the funds are usually transferred to your bank account. Alternatively, some issuers may automatically renew the deposit at prevailing interest rates for the same tenor.
No, in most cases, you cannot add more funds during the tenor. Fixed deposits are designed for one-time investments. If you wish to invest additional funds, you would need to open a new fixed deposit account.
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