The interest income on a fixed deposit is taxable. Banks deduct a 10% TDS (Tax Deducted at Source) on the interest income if the total interest in a year exceeds ₹40,000 for a non-senior citizen and ₹50,000 for a senior citizen (provided PAN details are submitted). However, if PAN card details are not submitted, banks deduct a TDS of 20% from the interest income.

Can you open more than one FD in the same bank?

You can open multiple fixed deposits with the same bank. Further, you can book multiple fixed deposits with different banks simultaneously based on your financial goals and needs.

How to avoid TDS deduction on FD interest?

To avoid TDS deductions from FD investment, account holders can submit Form 15G/H to the issuing financial institution at the beginning of the financial year.

Monthly Interest for ₹2 Lakh Fixed Deposit

Name: Monthly Interest for ₹2 Lakh Fixed Deposit
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Booking a ₹2 lakh fixed deposit can help you earn a substantial amount every month if you choose a leading financial institution offering competitive interest rates. However, the interest earnings vary based on the tenure of the FD. Ensure to choose a tenure that offers a high interest rate to increase your monthly interest income from fixed deposits.

Monthly Interest on ₹2 Lakh Fixed Deposit

Here is the monthly interest on an FD of ₹2 lakh, for a tenure of 5 years for various interest rates:

Interest Rate Per Annum	Monthly Interest Payout (₹)
6.00%	1,000
6.50%	1,083
6.75%	1,125
7.30%	1,216
7.75%	1,291
8.05%	1,341
9.00%	1,500
9.10%	1,516

Interest Offered by Banks and NBFCs on ₹2 Lakh Fixed Deposit

Here are the interest rates offered by different banks and NBFCs for a tenure of 5 years and the interest that you earn monthly on a ₹2 lakh FD:

Banks and NBFCs	Interest Rate for Non-senior Citizens Per Annum	Monthly Interest Payout (₹)	Interest Rate for Senior Citizens Per Annum	Monthly Interest Payout (₹)
South Indian Bank	6.00%	1,000	6.50%	1,083
Unity Small Finance bank	8.15%	1,358	8.65%	1,441
Suryoday Small Finance Bank	8.25%	1,375	8.75%	1,458
Shivalik Small Finance Bank	6.50%	1,083	7.00%	1,166
Bajaj Finance Limited	8.10%	1,350	8.35%	1,391
LIC Housing Finance	7.75%	1,291	-	-
Shriram Finance	8.47%	1,411	8.97%	1,495
Mahindra Finance	8.10%	1,350	8.35%	1,391
PNB Housing Finance Limited	7.60%	1,266	7.80%	1,300
IndusInd Bank	7.25%	1,208	7.75%	1,291
HDFC Bank	7.00%	1166	7.50%	1,250
ICICI Bank	7.00%	1166	7.50%	1,250
Axis Bank	7.00%	1166	7.50%	1,250
Bandhan Bank	5.85%	975	6.35%	1,058
Kotak Mahindra Bank	6.20%	1,033	6.70%	1,116
Yes Bank	7.25%	1,208	7.75%	1,291
Jana Small Finance Bank	8.20%	1,366	8.70%	1,450
AU Small Finance Bank	7.25%	1,208	7.75%	1,291
State Bank of India	6.50%	1,083	7.50%	1,250
Punjab National Bank	6.50%	1,083	7.00%	1,166

Visit our website to compare and open a fixed deposit with your chosen bank or NBFC now!

Monthly Interest Payout on ₹2 Lakh Fixed Deposit

Assuming the interest rate as 8.20%, a ₹2 lakh FD for 5 years tenure can help you earn the following on maturity:

Principal: ₹2,00,000

Interest Rate: 8.20%

Monthly interest payout = ₹2,00,000 × 8.20% / 12 = ₹1,366

Total interest earned in 5 years (interest payable monthly): ₹82,000

Total amount received on maturity after 5 years if interest is not withdrawn before = Principal + Interest = ₹2,00,000 + ₹82,000 = ₹2,82,000

In case you use a fixed deposit calculator, you need to input the principal amount, tenure and interest rate to fetch the interest amount and total amount receivable on maturity.

TDS on ₹2 Lakh Fixed Deposit

Here are the applicable TDS conditions for monthly interest on a ₹2 lakh FD:

If the total interest earned in a financial year exceeds ₹40,000 for a non-senior citizen, a TDS of 10% is deducted.
In case the total interest earned by a senior citizen during a financial year exceeds ₹50,000, a TDS of 10% is deducted by the bank.
If you do not submit your PAN card details, a TDS of 20% is deducted by the bank.

Penalty on Premature Withdrawal of ₹2 Lakh Fixed Deposit

In case of the depositor’s emergency, banks and NBFCs allow premature withdrawal of fixed deposits. However, banks charge a penalty of 1% on the interest rate for the tenure for which the FD remained booked. Few financial institutions might charge premature withdrawal fees from the depositor.

Consider the following example to understand interest payout on premature FD withdrawal. Suppose you deposit ₹2 lakh for 2 years at the interest rate of 8.20%. If you opt for premature withdrawal after 1 year, the interest rate effective for the 1-year tenure is 7.20% (assumed). Penalty will apply at the rate of 1% on 7.20%.

The following table illustrates the calculation of interest payout:

Parameter	Details
FD Principal	₹2,00,000
Maturity Amount after 2 years	₹2,34,144
Interest Rate for 2 years	8.20%
Effective Interest Rate for 1 year	7.20%
Penalty rate for Premature Withdrawal	1%
Final Interest Rate	6.20%
Final Amount Received After 1 year	₹2,12,400

Based on the tenure of your fixed deposit and the interest rate, a ₹2 lakh fixed deposit can help you earn secured interest income. However, to avoid penalty on interest for premature fixed deposit withdrawals, you can book an FD with the money which you do not need for the concerned tenure. This will help you earn higher interest on the FD principal.