Monthly Interest on 40 Lakh Fixed Deposit
Updated on: 28 Dec 2023 | 6 min read
Looking for a safe and secure investment? Then Fixed Deposit (FD) is your cup of tea. It's an easy and safe form of investment where you can generate monthly and steady income. However, it's essential to research carefully, compare interest rates, and choose a reliable bank or financial institution to make your investment journey smooth and successful.
In this blog, we will compare top financial institutions and get to know more about the monthly income generated by investing 40 Lakh in FD.
Monthly Interest for ₹40 Lakhs in FD 2023
Public Sector Banks
| Bank Name | Interest rate (Regular) | ₹ 40 Lakh FD interest monthly | Interest rate (Senior Citizen) | ₹ 40 Lakh FD interest monthly |
|---|---|---|---|---|
| Punjab National Bank | 7.25% | 24,167/- | 7.75% | 25,833/- |
| Indian Overseas Bank | 7.25% | 24,167/- | 7.75% | 25,833/- |
| Indian Bank | 7.25% | 24,167/- | 7.75% | 25,833/- |
| State Bank of India | 7.10% | 23,667/- | 7.60% | 25,333/- |
| Union Bank of India | 6.70% | 22,333/- | 6.95% | 23,167/- |
Private Sector Bank
| Bank Name | Interest rate (Regular) | ₹ 40 Lakh FD interest monthly | Interest rate (Senior Citizen) | ₹ 40 Lakh FD interest monthly |
|---|---|---|---|---|
| DCB Bank | 7.90% | 26,333/- | 8.50% | 28,333/- |
| Bandhan Bank | 7.85% | 26,167/- | 8.35% | 27,833/- |
| RBL Bank | 7.80% | 26,000/- | 8.30% | 27,667/- |
| YES Bank | 7.75% | 25,833/- | 8.25% | 27,500/- |
| IndusInd Bank | 7.25% | 24,167/- | 8.25% | 27,500/- |
NBFC FDs
| NBFC | Interest rate (Regular) | ₹ 40 Lakh FD interest monthly | Interest rate (Senior Citizen) | ₹ 40 Lakh FD interest monthly |
|---|---|---|---|---|
| Shriram Finance | 8.18% | 27,267/- | 8.68% | 28,933/- |
| Bajaj Finserv Limited | 8.05% | 26,833/- | 8.28% | 27,600/- |
| PNB Housing Finance Limited (Non-cumulative option) | 7.58% | 25,267/- | 7.88% | 27,267/- |
| Mahindra Finance Limited (Non-cumulative option) | 7.50% | 25,000/- | 7.75% | 25,833/- |
| LIC Housing Finance | 7.25% | 24,167/- | 7.50% | 25,000/- |
Small Finance Bank
| Bank Name | Interest rate (Regular) | ₹ 40 Lakh FD interest monthly | Interest rate (Senior Citizen) | ₹ 40 Lakh FD interest monthly |
|---|---|---|---|---|
| Unity Small Finance Bank | 9.00% | 30,000/- | 9.50% | 31,667/- |
| Suryoday Small Finance Bank | 8.60% | 28,687/- | 9.10% | 30,333/- |
| Fincare Small Finance Bank | 8.51% | 28,367/- | 9.11% | 30,367/- |
| Ujjivan Small Finance Bank | 8.25% | 27,500/- | 8.75% | 29,167/- |
| AU Small Finance Bank | 8.00% | 26,667/- | 8.50% | 28,333/- |
*The interest is calculated using the Simple Interest formula
Interest on FD= Amount invested x Interest rate x (Duration/12 months)
Calculating Monthly Interest on a ₹ 40 Lakh FD - Alternate Method
To calculate interest for cumulative FDs, you can use the following formula:
A = P (1 + R/N)^(N*T)
Where:
A – Maturity amount
P – Deposited amount
R – Interest rate
N – Compounding frequency
T – Deposit term
For instance, if you deposit Rs. 40,00,000 for one year at a 6% interest rate compounded quarterly:
A = 40,00,000 * (1 + 0.06/4)^(4*1)
= ₹ 42,45,454/-
To find the annual interest, subtract the maturity amount from the deposited sum:
Annual interest =₹ 2,45,454/-
For monthly interest, divide the annual interest by 12:
Monthly interest = ₹20,455/-
Eligibility Criteria for FD
Following are the people eligible for FD
- Resident Indian
- Overseas Citizen of India or Person of Indian Origins
- HUFs
- Sole-proprietorship
- Partnership firms
- Family Trusts
- Companies, associations, clubs and societies
- NRIs 18 years or above
Documents required for FD
Following are the documents that are required to open FD
- A completed account opening application form.
- A valid ID proof, which can include: an Aadhaar card, PAN card, Voter's ID card, Passport, Driving licence,
- Government-issued identity card, Photo ration card, or Any other official document with your photograph.
- A valid address proof, which can include: an Aadhaar card, Passport, Voter's ID card, Driving licence, Utility bills like phone or gas bills, Rent agreement, Property deed etc.
FAQs
Do senior citizens receive better interest rates?
Yes, many banks offer senior citizens higher interest rates, usually 0.25% to 0.5% more than regular rates.
What happens if the depositor passes away before the FD matures?
In the unfortunate event of the depositor's death before FD maturity, the money will be paid to the nominee.
What's the range of tenure for FD investments?
The minimum tenure for FDs is typically 7 days, with a maximum tenure of up to 10 years.
Is there any taxes applicable on 40 lakh monthly interest on FD?
According to Section 194A of the Income-tax Act,1961, TDS applies to the interest earned on fixed deposits. TDS @ 10% is deducted if interest income exceeds ₹40,000 (₹ 50,000 for resident senior citizens) during the financial year. But, if PAN details are not provided, TDS @ 20% is deducted from the interest income.
What is the typical interest rate for 40 Lakh FD with monthly interest?
The interest rate of FD is decided by the bank and financial institution. It depends upon various economic and monetary factors and prevailing market conditions. Investors should always do proper research before investing in any bank FD.
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