Monthly Interest on 1 Lakh Fixed Deposit

Fixed Deposits (FDs) are among the most trusted and popular investment options in India, offering assured returns, safety and flexibility. Whether you’re looking for steady monthly income or a lump sum payout at maturity, an FD is a secure way to grow your wealth. This guide will help you understand how monthly interest payout works for a Fixed Deposit of ₹ 1 lakh, the factors affecting interest rates and how to maximise your returns.

Understanding Fixed Deposits

A Fixed Deposit (FD) is an investment product offered by banks and select financial institutions where you park a specific amount of money for a fixed tenure. In return, you earn interest at a pre-decided rate.

For instance, if you invest ₹ 1 lakh in an FD, you can opt for:

• Cumulative FD: Interest is compounded and paid at maturity, along with the principal (FD amount).

• Non-Cumulative FD: Interest is paid out periodically (monthly, quarterly, half-yearly or yearly) and the principal is returned at maturity.

Monthly payouts are ideal for individuals seeking regular income.

How Does Monthly Interest Work?

When you choose a Fixed Deposit with monthly interest payout, the bank calculates the annual interest and divides it into 12 equal parts. This monthly amount is then credited to your savings account.

Let us understand it with an example. Suppose you invest ₹1,00,000 for a tenure of 1 year and 6 months.

1. If you're a senior citizen, and the interest rate is 6.90% per year, you will get around ₹572 every month as interest.

2. If you're a general citizen, and the rate is 6.40% per year, you will receive about ₹530 per month.

This way, your money stays safe while giving you a steady monthly income.

Disclaimer: *The estimated EMIs are calculated using ICICI Bank’s FD Calculator. Final values may vary subject to ICICI Bank’s policy.

Factors Affecting FD Interest Rates

1. Deposit Tenure

The time period for which you keep your money in an FD affects the interest rate. Short-term FDs (7 days to 1 year) offer lower interest. Long-term FDs (2–10 years) usually offer better rates. For example, with ICICI Bank, you can earn up to 6.60% (general citizen) or 7.10% (senior citizen) based on your tenure and age.

2. Bank Chosen

ICICI Bank offers competitive interest with the safety and trust of a reputed institution. Choosing a trusted bank ensures your money is safe and gives you peace of mind, along with convenient services.

3. Type of FD

There are regular FDs and Senior Citizen FDs. Regular FDs offer up to 6.60% for those below 60. If you're 60 or older, you can get up to 7.10% interest with a Senior Citizen FD.

4. Economic Conditions

FD rates are affected by RBI policies, inflation, and repo rates. When the RBI raises interest rates to control inflation, banks may also increase FD rates. Keeping an eye on economic trends can help you invest at the right time for better returns.

Monthly Interest Rates for ₹ 1 lakh FD

In this table, get an idea of the monthly interest payouts for a Fixed Deposit of ₹1 lakh for a term of 3 years, based on varying rates:

Disclaimer: *The estimated EMIs are calculated using ICICI Bank’s FD Calculator. Final values may vary subject to ICICI Bank’s policy.

Benefits of Monthly Interest FDs

Monthly interest FDs are particularly suitable for individuals seeking regular income. Here’s why:

1. Steady Cash Flow

Receive guaranteed returns every month, making it easier to manage expenses.

2. Low Risk

FDs are secure investments unaffected by market fluctuations, providing peace of mind.

3. Ideal for Retirees

Senior citizens can supplement their pensions with monthly interest payouts.

4. No Principal Withdrawal

Your principal remains intact while you enjoy monthly income.

How to Open a Fixed Deposit with ICICI Bank?

Online:

Through Internet Banking:

• Log into ICICI Bank Internet Banking

• Go to Bank Accounts > Deposits

• Click on ‘Open Fixed Deposit’

• Choose your FD type

• Enter the FD amount (minimum ₹ 10,000)

• Select the FD tenure and interest payout option

• Click on ‘Start FD’ to complete the process.

Through iMobile App:

• Log into the iMobile app

• Click on ‘Accounts & FD / RD’

• Next, select ‘Fixed Deposits’ and click on ‘Open FD’

• Enter the amount (minimum ₹ 10,000) and select the FD type, tenure and interest payout.

• Then, select your Account for payment, agree to the disclaimer and click on ‘Submit’. You can also choose to set the FD on Auto Renewal.

Offline:

• Visit any ICICI Bank Branch

• Fill out the FD application form

• Submit the form along with KYC documents and the deposit amount.

Taxation on Monthly Interest

Interest earned on FDs is taxable under ‘Income from Other Sources’.

• If the annual interest exceeds ₹ 40,000 (₹ 50,000 for senior citizens), TDS (Tax Deducted at Source) is deducted at 10%

• Submit Form 15G / 15H if your income is below the taxable limit to avoid TDS

• Report interest income in your ITR, even if TDS is not deducted.

Maximising FD Returns

1. Compare Rates

Check interest rates across different tenures and choose a tenure that offers the best returns.

2. Opt for Senior Citizen FDs

Senior citizens can earn up to 0.55% higher rates on their deposits.

3. Use an FD Calculator

Tools like the FD Calculator help estimate monthly interest accurately.

4. Split Your Deposits

Consider splitting ₹ 1 lakh into multiple FDs with different tenures for better liquidity and returns.

5. Choose the Right Tenure

Short-term FDs provide quick access to funds, while long-term FDs lock in higher rates.

Who Should Opt for Monthly Payout FDs?

Monthly payout FDs are perfect for:

• Retirees: To supplement pension income

• Homemakers: To manage household expenses

• Investors Seeking Liquidity: Enjoy regular cash flow without breaking the FD.

Conclusion

A Fixed Deposit with monthly interest payouts is a smart way to secure a regular income while keeping your principal safe. With competitive rates and flexible options, ICICI Bank’s Fixed Deposits are designed to cater to your financial needs. Whether you’re planning for retirement, managing monthly expenses or looking for a low-risk investment, an FD with monthly payouts can provide the stability and assurance you need. Use the ICICI Bank FD Calculator to plan your investment today!

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