Investing

How much interest will I get on a Rs 10 lakh fixed deposit?

The headline interest, the monthly payout version, and — the part that decides whether an FD is worth it — what is left after tax.

A Rs 10 lakh fixed deposit at 7% a year pays about Rs 70,000 of interest a year before tax — roughly Rs 5,833 a month on a monthly-payout FD. On a cumulative FD with quarterly compounding it matures at about Rs 14,14,778 after 5 years. FD interest is taxed at your slab rate, so a 30% bracket taxpayer keeps only about Rs 48,860 of that Rs 70,000, an effective 4.9%.

Worked out 2026-09-04 (IST) · 7% a year, quarterly compounding for cumulative FDs, TDS and slab tax as noted

Interest by rate and tenure

Cumulative FD, quarterly compounding, on a Rs 10,00,000 deposit.

Maturity value of a Rs 10,00,000 FD (Rs)
Rate	1 year	2 years	3 years	5 years	10 years
6.0%	10,61,364	11,26,493	11,95,618	13,46,855	18,14,018
6.5%	10,66,602	11,37,639	12,13,408	13,80,420	19,05,559
7.0%	10,71,859	11,48,882	12,31,439	14,14,778	20,01,597
7.5%	10,77,136	11,60,222	12,49,716	14,49,948	21,02,349
8.0%	10,82,432	11,71,659	12,68,242	14,85,947	22,08,040

The monthly payout version

A non-cumulative FD pays interest out instead of compounding it, which is what retirees usually want.

Monthly interest payout on a Rs 10,00,000 FD
Rate	Interest per year	Interest per month	Per month after 30% tax
6.0%	60,000	5,000	3,500
6.5%	65,000	5,417	3,792
7.0%	70,000	5,833	4,083
7.5%	75,000	6,250	4,375
8.0%	80,000	6,667	4,667

What tax does to the return

Rs 70,000 of annual FD interest, by tax bracket
Your slab rate	Tax on the interest	You keep	Effective post-tax FD rate
0%	0	70,000	7.00%
5%	3,500	66,500	6.65%
10%	7,000	63,000	6.30%
20%	14,000	56,000	5.60%
30%	21,000	49,000	4.90%

The inflation check nobody runs. At 7% before tax and a 30% slab, your real return after 5% inflation is about −0.1% — the deposit is very slightly losing purchasing power. FDs are a safety instrument, not a growth one; use them for money you cannot afford to see fall, and something else for money that has to grow.

Check your own numbers

Compare payout and cumulative FDs at your bank's actual rate and tenure.

FD CalculatorDeposit, rate and tenure to maturity value, total interest and monthly payout.

Frequently asked

How much TDS does the bank deduct on FD interest?

Banks deduct 10% TDS once your FD interest with them crosses Rs 40,000 in a financial year, or Rs 50,000 if you are a senior citizen. On Rs 70,000 of interest that is Rs 7,000 withheld. TDS is not the final tax: the interest is added to your income and taxed at your slab, so a 30% bracket taxpayer pays the balance at filing. If your total income is below the taxable limit, submit Form 15G or 15H to stop the deduction.

Is FD interest taxed even if I do not withdraw it?

Yes, on an accrual basis. Interest credited to a cumulative FD each year is taxable that year even though you receive nothing until maturity. This surprises people who assume a 5-year cumulative FD is taxed once at the end. Report the interest annually — the bank's Form 26AS and AIS already show it.

Do senior citizens get a better rate?

Almost always 0.5% more, and some banks add another 0.1-0.25% on very long tenures. On Rs 10 lakh, that 0.5% is Rs 5,000 a year. Senior citizens also get a deduction of up to Rs 50,000 a year on interest income under section 80TTB, but only under the old regime.

Is an FD better than a debt mutual fund?

Since April 2023 both are taxed at slab rates, so the old indexation advantage of debt funds is gone. What remains is that an FD gives an assured return and DICGC insurance up to Rs 5 lakh per bank per depositor, while a debt fund is more liquid and has no premature-withdrawal penalty. For money you may need at an unpredictable moment, the fund; for a fixed goal on a fixed date, the FD.

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