Understanding Monthly Interest for a ₹50 Lakh Fixed Deposit (FD)

Investing ₹50 lakhs in a fixed deposit is a solid strategy to secure a regular monthly income. Proper research and a comparison of FD interest rates allow you to maximize returns while keeping your money safe. Here’s a breakdown of monthly interest earnings for a ₹50 lakh FD, along with answers to commonly asked questions.

Monthly Interest for ₹50 Lakh FD in 2024

The table below shows the estimated monthly interest earnings for a ₹50 lakh FD across various banks, assuming a tenure of 5 years.

Bank Name	Interest Rate	Monthly Interest
Bank of Maharashtra	5.80%	₹24,167
City Union Bank	6.25%	₹26,042
Central Bank of India	6.25%	₹26,042
State Bank of India	6.50%	₹27,083
Punjab National Bank	6.50%	₹27,083
Indian Overseas Bank	6.50%	₹27,083
Bank of Baroda	6.50%	₹27,083
Axis Bank	7.00%	₹29,167
RBL Bank	7.10%	₹29,583
HDFC Bank	7.40%	₹30,833
ICICI Bank	7.60%	₹31,667

Note: Interest rates are indicative and subject to change. Confirm rates with the respective banks.

How to Calculate FD Monthly Interest

FD monthly interest is calculated using the formula:

Interest = (Deposit Amount × Interest Rate × Tenure) ÷ 12

For example, if you invest ₹50 lakhs at a 6.5% annual interest rate: (₹50,00,000 × 6.5%) ÷ 12 = ₹27,083 per month

Benefits of a ₹50 Lakh FD

Steady Income: Ideal for retirees or those seeking a regular cash flow.
Safe Investment: FDs are low-risk and secure your capital.
Loan Facility: You can borrow against your FD in case of emergencies.

Frequently Asked Questions

1. Can I take a loan against my ₹50 lakh FD?

Yes, most banks allow loans against FDs. You can typically borrow up to 60-90% of your deposit amount, avoiding the need to prematurely withdraw your FD and lose accrued interest.

2. Will I be penalized for early withdrawal?

Yes, premature withdrawal usually incurs a penalty. The penalty amount varies across banks and is deducted from the applicable interest rate.

3. What happens if the FD account holder passes away?

In such cases, the FD amount is transferred to the nominee mentioned in the account. If there is no nominee, legal heirs can claim the funds by submitting the required documents.

4. How do I maximize returns on a ₹50 lakh FD?

Choose banks offering higher interest rates.
Opt for longer tenures, as they often come with better rates.
Consider splitting the amount across multiple banks for diversification.

Alternatives to FDs for Monthly Income

While FDs are safe, consider these alternatives for potentially higher returns:

Monthly Income Plans (MIPs): Mutual funds offering regular payouts.
Post Office Monthly Income Scheme (POMIS): Government-backed scheme with steady returns.
Corporate FDs: Higher rates than traditional bank FDs but come with slightly higher risk.

Investing ₹50 lakhs in a fixed deposit is an excellent way to ensure a steady and predictable income. With competitive interest rates and flexible terms, you can align your FD investment with your financial goals. Whether it’s for retirement, emergencies, or general savings, an FD remains a reliable and straightforward choice.