How Much Monthly Interest Do You Earn on ₹1 Lakh Fixed Deposit?

Fixed Deposits or FDs are among the safest means of increasing your savings. They provide assured returns and are exempt from market risk. They’re an excellent choice if you desire stable, low-risk investments. Whether saving for a short-term objective or creating long-term wealth, FDs can comfortably fit within your financial strategy.

Once you decide to open an FD, one key choice is how you’d like to receive the interest. Some FDs pay interest at maturity. Others offer regular payouts on a monthly, quarterly or yearly basis. You can pick what suits your cash flow needs. If you prefer a steady monthly income, a monthly interest FD could be a better fit. It gives you fixed payouts every month while your principal stays intact. This is ideal for retirees or anyone looking for passive income.

Before you invest, it’s important to compare FD monthly interest rates offered by different banks and NBFCs. 

Read on to know how monthly income FDs work and how much you can earn on a 1 lakh FD interest per month.

How Does Monthly Interest on FD Work?

A monthly interest FD works differently from a regular FD. Instead of receiving the interest at maturity, you get it credited to your account every month. The principal remains locked for the full tenure, but you enjoy a regular cash flow.

This type of FD is suited for those who prefer a regular income instead of waiting till maturity. It helps manage monthly expenses, cover bills or add to your pension. If you’re considering this route, the  monthly interest for 1 lakh fixed deposit can give you a reliable payout without affecting your principal.

Monthly interest for 1 lakh fixed deposit

FD monthly interest rates in India usually range between 2.80% p.a. and 7.50% p.a. These rates vary depending on the bank and tenure. Here’s a quick snapshot of how much monthly interest you can earn on a ₹1 lakh FD at different interest rates:

Interest Rate (p.a.)	Monthly Interest Payout (Approx.)
3.00%	₹250.00
4.00%	₹333.33
5.00%	₹416.66
6.00%	₹500.00
7.00%	₹583.33
7.50%	₹625.00

You can use any online FD calculator to get a quick estimate of your monthly earnings. The actual amount you receive will depend on your bank’s offer and the chosen tenure. Most banks and NBFCs also give senior citizens slightly better rates. So, it’s always a wise practice to compare your options before choosing one.

Best Options to Earn Monthly Income from ₹1 Lakh FD

You can open a monthly payout FD with most banks and NBFCs. To get the best 1 lakh FD interest per month, it’s important to choose the right institution.

Here are some options you can explore:

• Public sector banks like SBI and PNB. They are reliable and widely trusted.
• Private banks such as ICICI, HDFC, Axis Bank and Kotak. They offer good rates and digital access.
• Small finance banks like AU Bank and Jana Small Finance Bank. These may offer slightly higher returns.
• NBFCs like Bajaj Finance. NBFCs are also known for attractive rates.

Before investing, always compare interest rates, withdrawal rules and safety ratings. This helps you get the most from your ₹1 lakh while ensuring a steady monthly income.

Benefits of Monthly Income Fixed Deposits

A monthly interest FD is a practical choice if you’re looking for regular, hassle-free income. The best part is that you can earn monthly interest for 1 lakh fixed deposit without risking your capital. Here’s what makes it an attractive investment option:

• Steady cash flow: Ideal for covering routine expenses like rent, EMIs or household bills
• Safe and predictable: Offers fixed returns without any market-linked risk
• Flexible tenures: Pick a duration that matches your goals. Choose from a few months to several years
• Easy to manage: Most banks let you open and monitor your FD online
• Great for low-risk planning: Well-suited for retirees or anyone wanting passive income

Even with a modest investment like ₹1 lakh, you can earn a fixed monthly return. Your savings stay safe while giving you regular income. And if you ever need more than what your FD pays monthly, Fibe can help. Fibe’s Instant Cash Loan lets you borrow up to ₹5 lakhs without lengthy paperwork or collateral. You can easily apply online and receive the funds in your account within 2 minutes. Just download the Fibe App and access instant funds!

FAQs on Monthly Interest on 1 Lakh Fixed Deposit

1. Will the monthly income FD scheme provide me with monthly interest?

Yes, monthly income FDs are designed specifically to offer fixed monthly payouts. The interest earned is credited to your bank account every month. This tool gives you a steady income stream without touching your principal.

2. Where to invest 1 lakh to get a monthly income?

You can invest in monthly payout FDs offered by public and private banks, NBFCs or small finance banks. Always compare interest rates, withdrawal rules and the bank’s reliability before making a decision.