Who is eligible to open a fixed deposit of ₹40 Lakhs?

Indian residents, including HUFs, sole proprietorships, partnerships, trusts and companies, are eligible to open a ₹40 lakh FD, provided they meet certain documentation requirements.

What is the maximum period for investing ₹40 lakh in a fixed deposit?

FD tenures typically range from as short as 7 days up to 10 years. Some banks, however, also provide options for extended periods, such as 20 or even 30 years.

Does premature withdrawal from a ₹40 lakh FD incur a penalty?

Yes, there is a penalty applicable on premature withdrawal from a ₹40 lakh FD. The penalty varies based on the terms and conditions of the respective bank or NBFC.

40 Lakh Fixed Deposit Interest Per Month

Name: 40 Lakh Fixed Deposit Interest Per Month
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Wondering how much monthly interest income a ₹40 lakh fixed deposit could generate? The monthly payout you receive varies depending on the interest rate offered by the bank or NBFC and the selected deposit tenure. To make the most of a fixed deposit of ₹40 lakh and ensure a steady monthly income, it is essential to research and choose a trustworthy bank or financial institution.

Monthly Interest Payout on ₹40 Lakh Fixed Deposit

The following table highlights the monthly returns on ₹40 lakh FD with different interest rates:

Monthly Interest Rate	Interest Payout Per Month (in ₹)
6.00%	20,000
6.50%	21,666
7.00%	23,333
7.50%	25,000
8.00%	26,666
8.50%	28,333
9.00%	30,000
9.50%	31,666
10.00%	33,333

₹40 Lakh Fixed Deposit Interest Provided by Banks and NBFCs in 2025

Below is a table showing the potential FD interest earnings on a ₹40 lakh FD per month with a 5-year term from leading banks and NBFCs.

Bank/NBFC	Interest Rate for General Citizens (p.a.)	Monthly Payout (in ₹)	Interest Rate for Senior Citizens (p.a.)	Monthly Payout for Senior Citizens (in ₹)
Suryoday SF Bank	8.25%	27,500	8.75%	29,166
Unity SF Bank	8.15%	27,166	8.65%	28,833
PNB Housing Finance Ltd.	7.40%	24,666	7.65%	25,500
Shivalik SF Bank	6.50%	21,666	7.00%	23,333
South Indian Bank	6.00%	20,000	6.50%	21,666
Shriram Finance	8.47%	28,233	8.97%	29,900
Bajaj Finance Ltd.	8.10%	27,000	8.35%	27,833
Mahindra Finance Ltd.	8.10%	27,000	8.35%	27,833
LIC Housing Finance	7.75%	25,833	-	-
IndusInd Bank	7.25%	24,166	7.75%	25,833
YES Bank	7.25%	24,166	8.00%	26,666
ICICI Bank	7.00%	23,333	7.50%	25,000
HDFC Bank	7.00%	23,333	7.50%	25,000
IDFC First Bank	6.50%	21,666	7.00%	23,333
Axis Bank	7.00%	23,333	7.75%	25,833
Kotak Mahindra Bank	7.00%	23,333	7.60%	25,333
State Bank of India	6.50%	21,666	7.50%	25,000
AU Small Finance Bank	7.25%	24,167	7.75%	25,833
Ujjivan Small Finance Bank	6.50%	21,666	7.50%	25,000

Yearly Interest Payout on ₹40 Lakh Fixed Deposit

Refer to the table below detailing the annual interest on a ₹40 lakh fixed deposit at an interest rate of 8.97% per annum, shown across different tenures:

Investment Tenure	Annual Payout
1 year	₹43,58,800
2 years	₹47,49,784
3 years	₹51,75,840
4 years	₹56,40,113
5 years	₹61,46,031

TDS on ₹40 Lakh Fixed Deposit

To make the most of your fixed deposit returns, understanding tax deductions is crucial. Here is what you need to keep in mind:

Banks and NBFCs will apply a Tax Deducted at Source (TDS) of 10% on annual interest income if it exceeds ₹40,000.
For senior citizens, the annual exemption limit increases to ₹50,000 on interest earnings from FDs.
If your PAN card is not provided to the bank or NBFC, a higher TDS rate of 20% will apply to the FD interest income.

Calculation of Monthly Interest Payout on a ₹40 Lakh Fixed Deposit

You can calculate the interest on ₹40 lakh FD per month either manually or by using an FD calculator. For the calculator, simply enter the principal amount, interest rate and tenure to get the monthly payout estimate.

To calculate the ₹40 lakh fixed deposit monthly interest payout, you can use the following formula:

Monthly Interest Payout = Principal × Annual Interest Rate / 12

Suppose you invest ₹40 lakh in an FD with an annual interest rate of 6.5% for a tenure of 2 years. Here is how you can calculate the monthly interest:

Monthly Interest = ₹40,00,000 × 6.5% / 12 = ₹40,00,000 × 0.07 / 12 = ₹21,666.66

Penalty for Premature Withdrawal of a ₹40 Lakh Fixed Deposit

Prematurely withdrawing from a fixed deposit can impact your earnings due to reduced interest rates and possible penalty charges from banks and NBFCs. These penalties and adjusted rates can notably reduce your returns.

Suppose you invest ₹40 lakh in an FD for 3 years at an interest rate of 8.00% per annum, but you decide to withdraw after 2 years. In this case, the interest rate for the 2-year term would drop to 7.00% per annum With an additional 1% penalty, the effective rate becomes 6.00% per annum, leading to lower returns.

Parameter	Details
Principal amount invested	₹40,00,000
Maturity after 3 years	₹50,38,848
Interest rate at the time of booking	8.00% per annum
Effective interest rate for 1-year tenure	7.00% per annum
Premature withdrawal penalty rate	1% per annum
Final interest rate	6.00% per annum
Final amount payable	₹47,20,000

A ₹40 lakh fixed deposit can be a reliable source of regular income, offering consistent monthly or yearly payouts depending on the interest rate and tenure. However, it is essential to consider factors like TDS, premature withdrawal penalties, and interest rates when planning your investment. With Stable Money, you can invest in FDs of different banks and financial institutions, ensuring the best returns and flexibility tailored to your needs. Start today and secure a steady income stream for your future!