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What Is The Monthly Interest Breakdown On A Rs. 2 Lakh Fixed Deposit


by Mahindra Finance


April 25, 2024


4 mins read

When it comes to financial security, investing your hard earned money wisely is crucial. One such investment option that offers stability and regular income is a fixed deposit (FD). With an FD, you can earn interest on your savings while keeping your funds safe. If you're considering investing Rs. 2 lakhs in an FD, it's essential to understand how the monthly interest is calculated and what returns you can expect.In this article, we will break down the monthly return on a fixed deposit of Rs. 2 lakh fixed deposit and explain the key factors that determine it. By the end of this guide, you'll have a clear understanding of how much you can expect to earn every month from your investment.

Calculating your FD rate

Before we dive into the monthly interest breakdown, let's first understand how banks calculate the FD rate. The FD rate depends on various factors such as market conditions, competition among banks, and government policies. It's important to note that interest rates can vary over time, so it's always a good idea to check for current rates before making any investment decisions.

To calculate the FD rate for your Rs. 2 lakh investment, follow these steps:

  1. Research different banks: Start by exploring different banks and financial institutions that offer monthly returns on fixed deposits.
  2. Compare interest rates: Look for banks that offer competitive interest rates for your desired duration.
  3. Use an online calculator: Once you have selected a few options, use an online calculator to calculate the interest earned on your investment. These calculators are user-friendly and provide accurate results based on the rate of interest and tenure you choose.

By following these steps, you can determine the interest rate on your Rs. 2 lakh fixed deposit. Now, let's move on to understanding the monthly interest breakdown.

Monthly 2 lakh FD interest breakdown

The monthly interest you earn on a Rs. 2 lakh fixed deposit depends on both the interest rate offered by the bank and the duration of your investment. 

A higher interest rate translates into a higher monthly interest payout. It's worth noting that banks may offer different rates based on their policies, so it's essential to compare rates before making a decision.

Tax deducted at source (TDS)

When investing in fixed deposits, it's important to be aware of tax implications. The interest earned on FDs is subject to taxation, and banks deduct Tax Deducted at Source (TDS) on the interest income above a certain threshold.


Investing in a fixed deposit can provide you with a stable monthly income and financial security. By understanding how a Rs. 2 lakh fixed deposit interest per month is calculated and considering factors such as interest rates and taxation, you can make informed decisions about your investments. Remember to compare different banks' rates before finalising your investment choice. 

And if you're looking for a trusted financial partner that offers an attractive monthly return on fixed deposit and personalised solutions tailored to your needs, consider Mahindra Finance.

By taking these steps and making informed decisions about your finances, you can ensure 2 lakh FD interest and pave the way for a secure future.


Q: Can I withdraw the interest earned on my 2 lakh fixed deposit every month?

A: Yes, most banks offer the option of withdrawing the monthly interest earned on your fixed deposit directly into your bank account. This allows you to enjoy the benefits of a regular income stream.

Q: Is it possible to calculate the monthly interest on a 2 lakh fixed deposit manually?

A: Yes, you can calculate the monthly interest on a 2 lakh fixed deposit manually using the following formula: Interest = (Principal Amount Rate of Interest)/12. However, using an online FD calculator is much quicker and more accurate.

Q: How can I reinvest the monthly interest earned on my 2 lakh fixed deposit?

A: If you choose to reinvest the monthly interest earned on your fixed deposit, most banks offer options such as compounding the interest or automatically reinvesting it into another fixed deposit.

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