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Investing 1 lakh in a fixed deposit (FD) can be a conservative and low-risk approach to preserve your capital and earn a stable return. However, it’s important to note that the interest rates on FDs can vary over time. Therefore, it’s recommended to check for the current interest rates before making any investment decisions.
Monthly Interest for 1 Lakh in Fixed Deposit 2024
The following table lists the rates of interest on monthly income FDs and the monthly interest for 1 lakh fixed deposit:
| Monthly Interest for 1 Lakh | Bank Name | Interest Rates |
| Rs. 633 | ICICI | 7.60% |
| Rs. 625 | Bank of Maharashtra | 7.50% |
| Rs. 654 | Axis Bank | 7.85% |
| Rs. 604 | Central Bank of India | 7.25% |
| Rs. 708 | AU Small Finance Bank | 8.50% |
| Rs. 646 | Bank of Baroda | 7.75% |
| Rs. 625 | Bank of India | 7.50% |
| Rs. 633 | State Bank of India | 7.60% |
| Rs. 646 | HDFC | 7.75% |
| Rs. 646 | Indian Overseas Bank | 7.75% |
| Rs. 692 | RBL Bank | 8.30% |
| Rs. 667 | LIC | 8.00% |
| Rs. 723 | Shriram Finance | 8.68% |
| Rs. 625 | City Union Bank | 7.50% |
| Rs. 646 | Punjab National Bank | 7.75% |
| Rs. 759 | Fincare Small Finance | 9.11% |
| Rs. 625 | Post Office | 7.50% |
*Highest interest rate for each bank were taken, for detailed interest rates and tenure please visit their respective bank pages.
Things to consider when investing in 1 Lakh in FD:
- Interest Rates: Different banks offer varying interest rates on FDs. Higher interest rates can help you earn more on your investment. Compare the rates offered by different banks and choose the one that provides the best returns.
- Tenure: FDs have a fixed tenure, usually ranging from a few months to several years. The interest rates may vary depending on the duration of the deposit. Consider your financial goals and liquidity needs when selecting the tenure.
- Interest Payment: FDs can provide interest payments at different intervals, such as monthly, quarterly, annually, or at maturity depending on the compounding option. Choose an option that suits your income requirements.
- Premature Withdrawal: Understand the terms and conditions related to premature withdrawal of your FD. In case you need the funds before the maturity period, there might be penalties or reduced interest rates.
- Safety: FDs are considered safe investments because they are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to Rs. 5 lakh per depositor per bank. Ensure that you choose a reputable bank for your investment.
- Tax Implications: Interest earned on FDs is subject to tax. The tax liability depends on your income slab. Consider the tax implications while estimating the returns from your investment.
Benefits of Monthly Income Fixed Deposits
As the name suggests, monthly income fixed deposits offer regular income in the form of interest on lump sum deposits. The following are the benefits of Monthly Income Fixed Deposits:
- FDs provide a stable and predictable source of income every month, which can help meet regular expenses or save for future goals.
- Monthly Income FDs offer higher interest rates than normal fixed deposits, as the interest is paid monthly instead of compounded.
- These deposits are more liquid than other investment schemes, as the depositors can withdraw their money at any time, subject to a penalty.
- Monthly Income FDs have flexible tenures and no upper limit on the deposit amount. Thus, depositors can choose the duration and amount of their investment according to their needs and preferences.
Who is Eligible for Monthly Income FDs?
Indian residents, sole proprietorship firms, partnership firms &companies, HUFs, associations, clubs, societies, and family trusts can open monthly income FDs.
TDS on Rs 1 Lakh Fixed Deposit
The income tax on the monthly interest on INR 1 lakh fixed deposit varies with the income bracket. Banks do not deduct any TDS if the annual interest of all fixed deposits is below INR 40,000. But if the annual interest from FDs exceeds INR 40,000 for regular citizens or INR 50,000 for senior citizens, the bank will deduct 10% TDS. In case of no PAN submission, the TDS would be 20%.
Frequently Asked Questions
The 1 lakh fixed deposit interest per month is determined by the interest rate offered by the bank. There are no restrictions on the minimum or maximum limit of the monthly interest, as it will vary based on the prevailing interest rate.
The 1 lakh FD interest rates for 1 month vary across banks and financial institutions. The interest rates range from 7.25% to 9.11% per annum. It is advisable to compare rates offered by different banks before making a decision.
Firstly, senior citizen depositors enjoy higher interest rates on FD than others. Next, they receive a higher TDS deduction compared to regular citizens. Additionally, if senior citizen does not have a taxable income, they can submit Form 15H to enjoy an exemption from TDS deductions.
Yes, the interest earned from the 1 Lakh FD is subject to tax as per the prevailing income tax laws. The interest income is added to your taxable income and taxed at the applicable slab rate.
In most cases, premature fixed deposit withdrawal may attract penalties and lower interest rates. However, some banks may offer partial withdrawal options or allow premature closure under specific circumstances. It is essential to check the terms and conditions of the scheme before investing.
With 7 percent annual interest rate on 1 lakh, you would earn a simple interest of 700 rupees per year or Rs. 58.33 per month. When the 7 percentage interest for 1 lakh compounded for 1 year, you will earn Rs. 7312.01 on compounding daily, Rs. 7,308.47 on weekly, Rs. 7,299.09 on monthly and Rs. 7,292.47 on compounding quarterly as interest.
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