pnb housing
February 28th, 2023

How to Calculate Monthly Interest for 1 Lakh Fixed Deposit?

Blog Seprator

Fixed deposits are the preferred investment instruments for many to save their money and get assured returns. It is a secure option for saving funds for future goals and financial emergencies. Most financial institutions offer multiple fixed deposit products to best suit an individual’s financial goals and preferences. Fixed deposit interest rates vary based on the financial institution, type of FD chosen, tenure, and even age bracket.

Before delving into estimating the monthly interest for a 1 lakh fixed deposit, it’s important first to understand the different types of FDs.

Different Types of Fixed Deposits

Financial institutions offer two types of FDs based on the interest payout patterns like Cumulative and Non- Cumulative.

  • Non-cumulative: The interest accrued on a non-cumulative fixed deposit is paid as per a frequency of the depositor’s choice. It can be monthly, quarterly, half yearly & yearly and the principal amount remains untouched at the time of maturity.
  • Cumulative: The interest accrued under this category of FDs keeps getting added to the principal amount. The investor can benefit from compounding interest on the cumulative balance paid at maturity. 

Which FD is Better? 

Fixed deposit interest rates vary from institution to institution, thereby determining one’s return on investment. Those dependent on the interest from Fixed Deposits as their income, like retired persons and senior citizens, would benefit from the non-cumulative fixed deposit. On the other hand, those who have saved to fulfil their long-term financial goals may opt for cumulative fixed deposits and benefit from the compounding.

Must Read: What is a Fixed Deposit Receipt?

Fixed Deposit Interest Rates 

Here are the interest rates from PNB Housing, using which you can calculate the interest on 1 lakh fixed deposit per month or year:

Fixed Deposit Interest Rates (upto ₹5 crore)
Tenure Cumulative Option* ROI (p.a.) Non-Cumulative Option ROI  (p.a.)
Month ROI (p.a.) Tentative yield to maturity Monthly Quarterly Half Yearly Annual
12 – 23 7.35% 7.35% 7.11% 7.15% 7.22% 7.35%
24 – 35 7.00% 7.25% 6.79% 6.83% 6.89% 7.00%
36 – 47 7.70% 8.31% 7.44% 7.49% 7.56% 7.70%
48 – 59 7.40% 8.26% 7.16% 7.20% 7.26% 7.40%
60 -71 7.50% 8.71% 7.25% 7.29% 7.36% 7.50%
72 – 84 7.40% 8.91% 7.16% 7.20% 7.27% 7.40%
120 7.40% 10.42% 7.16% 7.20% 7.27% 7.40%

A Few Points to Keep in Mind: 

  • Breaking an FD prematurely may alter the agreed interest rates. 
  • Senior citizens who are 60 years and over get a preferential rate of 0.25% higher than the FD interest rate up to the limit of fixed deposit of 1 cr. 

Must Read: Why Fixed Deposit is Good Option to Plan Your Vacation

How Much is the Monthly Interest for a 1 Lakh Fixed Deposit?

In today’s digital age, every financial institution provides a calculator online to help calculate non-cumulative, and cumulative fixed deposit interest rates. For the cumulative deposit, The formula used is: 

A = P (1+r/n) ^ (n * t), where:

  • A = maturity amount
  • P = principal amount
  • r = FD interest rate
  • n = compounding frequency
  • t = year tenor

1 lakh fixed deposit interest per month is determined by the frequency and prorated interest offered by the financial institution. The primary inputs that go into calculating monthly interest for a 1 lakh fixed deposit are the FD interest rate, tenor, and amount, which in this case is 1 lakh. 

Here is a snapshot of how your interest pay-outs would look for a Rs. 1 Lakh FD for 12 months tenure based on different pay out frequencies. 

Pay-Out Frequency Interest rate Annual total Interest Pay-out M, Q, H & Y Interest Pay-out Total Pay-out
Monthly 7.11% 6,581 548 1,06,581*
Quarterly 7.15% 6,620 551 1,06,620*
Half Yearly 7.22% 6,854 571 1,06,854*
Annual 7.35% 6,980 581 1,06,980*

So, if you are looking at determining monthly interest for a fixed deposit of 1 lakh, you can divide the monthly interest pay out at 7.11% which is 6,581p.a. and divide that by the number of months which is 12. The monthly interest for a Rs. 1,00,000 FD is Rs. 548.


Fixed deposits are a great investment instrument for people who want to play it safe and are risk averse. With the flexibility of pay out and easy availability, it continues to be a preferred choice for investors across the country.  Although before investing, it is best to get acquainted with all the options available to you and weigh them. 


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