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:

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

2. 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 monthly interest payout, the bank calculates the annual interest and divides it into 12 equal parts. This amount is credited to your Savings Account every month.

Illustrative Calculation

Let’s assume:

• Principal: ₹ 1,00,000

• Interest Rate: 7.25% p.a.

You’ll receive approximately ₹ 601 every month as interest.

Factors Affecting FD Interest Rates

Several factors determine the FD interest rate that you’ll get:

1. Deposit Tenure

• Short-term FDs (7 days to 1 year) generally offer lower rates

• Long-term FDs (2-10 years) often have higher rates, though this varies with market conditions.

2. Bank or Financial Institution

ICICI Bank provides competitive rates along with trust and convenient access, by virtue of being a large and established bank.

3. Type of FD

• Regular FD: For individuals under 60 years of age

• Senior Citizen FD: Offers an additional 0.5% - 0.55% interest for individuals aged 60 years and above

4. Economic Conditions

Interest rates are influenced by repo rate, inflation and RBI policies.

5. Principal Amount

Higher deposit amounts might get preferential rates.

Monthly Interest Rates for ₹ 1 lakh FD

Here’s an approximate idea of the monthly interest payouts for a Fixed Deposit of ₹ 1 lakh, based on varying rates:

Note: Use the ICICI Bank FD Calculator for accurate interest calculations based on tenure and rates.

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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