Monthly Interest for Rs. 5 Lakh Fixed Deposit (FD)

How much interest can you get on a Rs. 5 lakh Fixed Deposit per month? Know your monthly interest rates and potential earnings on Rs. 5 Lakh FD investment in this article.
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Monthly Interest on Rs. 5 Lakh FD
OPEN FD
4 mins
16 July 2024

Keeping your money idle in your account may seem safe, but it is not the best strategy for financial growth. When money sits ideal, it loses its value. Inflation, the rise in the cost of living over time, can erode the purchasing power of your money. To combat this, it is essential to explore investment options that not only preserve your capital but also provide additional returns.

Fixed deposits (FDs) stand out as a reliable choice in this scenario. By putting your money into an FD, you not only safeguard your principal amount but also earn a fixed rate of interest, ensuring your money works for you. FDs offer a balance of stability and returns, making them a practical option for those who want to see their money grow steadily while minimising the risks associated with market fluctuations.

One reliable FD provider is Bajaj Finance. Bajaj Finance offers competitive Fixed Deposit rates of up to 8.65% p.a., making it an ideal choice for investors seeking to invest in FDs. With a legacy of trust, flexible tenures, and additional benefits, Bajaj Finance stands out as a reliable platform for those looking to maximise returns on their FD investments.

How the type of FD affects monthly interest on Rs. 5 lakh Fixed Deposit

Types of fixed deposits (FDs) can impact the interest earning. FDs are broadly categorised into 2 types: cumulative and non-cumulative.

  1. Cumulative FDs:
    In cumulative FDs, interest is compounded, and the entire maturity amount (principal + interest) is paid at the end of the tenure. Cumulative FDs do not provide monthly interest payouts. The interest is reinvested and contributes to the overall growth of the investment.
  2. Non-Cumulative FDs:
    Non-cumulative FDs offer regular interest payouts options at predetermined intervals, such as monthly, quarterly, half-yearly, or annually.
    For Rs. 5 lakh Fixed Deposit, the monthly interest payout will depend on the interest rate offered by the financial institution.

Pro tip

Enjoy higher interest rate with Bajaj Finance Digital FD. Unlock returns of up to 8.65% p.a. by investing for 42 months via website and app.

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Some benefits of Fixed Deposits

  • Assured returns and capital protection: One of the primary advantages of Fixed Deposits is the assurance of returns, providing investors with a steady and predictable income stream. Bajaj Finance, known for its financial prudence, offers competitive interest rates, ensuring not only consistent returns but also the safety of the invested capital.

  • Safety and Security: Investors prioritise the safety of their hard-earned money, and Bajaj Finance Fixed Deposits are known for their robust financial standing and highest safety ratings like CRISIL AAA/STABLE and [ICRA]AAA(STABLE).

  • Flexibility in tenure: Bajaj Finance provides flexibility in choosing the tenure of Fixed Deposits, allowing investors to tailor their investments to meet specific financial goals. Whether short-term liquidity needs or long-term wealth creation, FDs offer tenures that align with diverse aspirations.

With Bajaj Finance, you have the option to choose between two types of fixed deposits: cumulative fixed deposit and non-cumulative fixed deposit.

  • The non-cumulative FD is suitable for investors seeking a regular income, with monthly interest pay-outs. This type is ideal for a monthly interest plan on a fixed deposit of Rs. 5 lakh.
  • Conversely, the cumulative FD is favoured by investors with long-term financial goals, prioritising both safety and growth over time. With these FDs, the principal amount, along with the accrued interest, is received on the maturity date.

Let us illustrate the interest calculation for a Rs. 5 lakh FD using the Bajaj Finance FD online calculator in various scenarios.

Also read: Corporate FD interest rate

Monthly interest payout for a Rs. 5 lakh Fixed Deposit

The following table illustrates the interest amounts earned based on the interest rates applicable when investing Rs. 5 lakh in an FD.

Deposit Amount

Interest Rate (p.a.)

Monthly Interest Payout

Rs. 5 lakh

6.00%

Rs. 2,500

Rs. 5 lakh

6.50%

Rs. 2,708

Rs. 5 lakh

7.00%

Rs. 2,917

Rs. 5 lakh

7.50%

Rs. 3,125

Rs. 5 lakh

8.00%

Rs. 3,333

Rs. 5 lakh

8.50%

Rs. 3,541

Rs. 5 lakh

9.00%

Rs. 3,750

Rs. 5 lakh

9.50%

Rs. 3,958

Rs. 5 lakh

10.00%

Rs. 4,166


What monthly interest can be generated from a Rs. 5 lakh fixed deposit?

Fixed deposits (FDs) stand as secure investments with minimal risk, often the first choice for those prioritising capital safety. FDs offer predetermined and fixed interest rates for the entire tenure, presenting a comparatively higher return.

Bajaj Finance further enhances flexibility by offering periodic interest payouts through the non-cumulative FD plan. Investors can choose from monthly, quarterly, half-yearly, or annual interest payouts based on their liquidity needs.

Investing Rs. 5 lakh in an FD with Bajaj Finance for five years can result in a relatively higher interest rate. Tailoring the investment duration from 12 to 60 months allows investors to align FDs with their short-term or long-term financial goals.

The following table shows the FD interest rates offered by Bajaj Finance on an FD of Rs. 5 lakh for a tenure of 60 months

Payout frequency

FD rates (Customers below the age of 60)

FD rates (Senior Citizens)

Monthly

7.81% p.a.

8.05% p.a.

Quarterly

7.87% p.a.

8.10% p.a.

Half-yearly

7.94% p.a.

8.18% p.a.

Annual

8.10% p.a.

8.30% p.a.

At Maturity

8.10% p.a.

8.35% p.a.


Following are the calculation of interest earnings for Rs. 5 lakh fixed deposit if the payout frequency is “monthly”, for customers below the age of 60 and senior citizens.

Customers below the age of 60 investing in an FD:

Deposit Amount

Tenure

Interest rate (Payout frequency: Monthly)

Total Interest

Maturity Amount

Rs. 5 lakh

12 months

7.16% p.a.

Rs. 35,800

Rs. 5,35.800

Rs. 5 lakh

24 months

7.53% p.a.

Rs. 73,000

Rs. 5,73,000

Rs. 5 lakh

36 months

7.81% p.a.

Rs. 1,16,550

Rs. 6,16,550

Rs. 5 lakh

44 months

7.95% p.a.

Rs. 1,47,583

Rs. 6,47,583

Rs. 5 lakh

60 months

7.81% p.a.

Rs. 1,94,250

Rs. 6,94,250


*All calculations are done using the Bajaj Finance FD Calculator

Senior citizens investing in an FD:

Deposit Amount

Tenure

Interest rate (Payout frequency: Monthly)

Total Interest

Maturity Amount

Rs. 5 lakh

12 months

7.39% p.a.

Rs. 36,950

Rs. 5,36,950

Rs. 5 lakh

24 months

7.91% p.a.

Rs. 79,100

Rs. 5,79,100

Rs. 5 lakh

36 months

8.05% p.a.

Rs. 1,20,750

Rs. 6,20,750

Rs. 5 lakh

44 months

8.19% p.a.

Rs. 1,50,150

Rs. 6,50,150

Rs. 5 lakh

60 months

 8.05% p.a.

Rs. 2,01,250

Rs. 7,01,250


*All calculations are done using the Bajaj Finance FD Calculator

  • Senior citizens enjoy a higher interest rate on a Rs. 5 lakh fixed deposit compared to customers below the age of 60, thanks to an additional interest rate benefit provided by Bajaj Finance.
  • Opting for a non-cumulative Bajaj Finance FD allows you to earn fixed monthly interest on a Rs. 5 lakh deposit. This differs from the cumulative FD option, which provides a lump sum amount at the maturity date instead of periodic payouts such as monthly, quarterly, half-yearly, or yearly.

Also read: What is NBFC FD rates

Why should you invest Rs. 5 lakh in an FD?

Investing Rs. 5 lakh in a Fixed Deposit (FD) is a smart choice offering many benefits. FDs are safe and stable, ensuring your investment stays secure. With guaranteed returns at a fixed interest rate, FDs provide a steady and predictable income, making them ideal for risk-averse investors.

Opting for a non-cumulative FD allows you to receive regular interest payouts, providing a consistent monthly income. FDs offer flexibility with diverse tenure options, allowing you to align your investment with specific financial goals. The process to invest in FD is simple as many financial institutions now provides easy online investment option.

Here is how to invest in a Bajaj Finance Fixed Deposit

  1. Click on ‘Open FD’ at the top of this page to open our online application form.
  2. Enter your 10-digit mobile number and verify the OTP sent to your phone.
  3. Fill in the investment amount, choose the investment tenure and the payout frequency. Enter your PAN card and date of birth.
  4. Complete your KYC: If you are an existing customer, confirm the details available with us, or edit to make any changes. For new customers, complete your KYC using Aadhaar Card.
  5. A declaration will be displayed. Please read it carefully and agree to the terms and conditions. Enter your bank details and proceed to pay.
  6. Complete your investment using Net Banking/ UPI or NEFT/ RTGS.

Once your fixed deposit is booked, you will receive the Fixed Deposit Acknowledgement (FDA) on your registered email address and as a link on your mobile number. An Electronic Fixed Deposit Receipt (e-FDR) will also be sent to your email ID within 3 working days (subject to documents being in the correct order).

Here is the eligibility criteria and documents required for opening a Rs. 5 lakh FD

Anyone can book our fixed deposit if they meet the basic criteria mentioned below.

  • Nationality: Resident Indians / Non-Resident Indians
  • Investor Type: Individuals, Senior Citizens, Minors, Sole Proprietorships, Partnership Firms, HUFs, Clubs, Associations, Societies, and Family Trusts
  • Documents Required: PAN and any KYC document: Aadhaar card/Passport/Driving license/Voter ID

*Documents can also be fetched from registered KYC.

You can update KYC Via CKYC, OKYC & Digi locker

Non-Resident Indians (NRIs), Persons of Indian Origin (PIO) and Overseas Citizens of India (OCI) can connect with our representative or write to us on wecare@bajajfinserv.in.

Conclusion

Investing Rs. 5 lakh in a Fixed Deposit can be a wise choice. It offers a stable and secure way to grow your money. With different tenures FD provides a predictable monthly income. Remember to check the terms and interest rates offered by different financial institution to make informed financial decision.

Calculate your expected investment returns with the help of our investment calculators

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Frequently asked questions

What is the Digital FD offered by Bajaj Finance?

Bajaj Finance has launched a new FD variant called "Bajaj Finance Digital FD" for a period of 42 months. Bajaj Finance is providing one of the highest interest rates of up to 8.65% p.a. for senior citizens and for the customers below the age of 60 they are providing up to 8.40% p.a. The Digital FD can be opened and managed only through the Bajaj Finserv website or app.

What is the minimum and maximum tenure for investing in an FD account?

It depends on the financial institution offering it. Generally, FD tenures range from 7 days to 10 years.

Will there be a penalty for early withdrawal of an FD?

 Yes, there is a penalty for early withdrawal, and the specific amount varies from different financial institution; it is important to check terms and conditions before investing.

What is the interest on Rs. 5 lakh FD for 1 year?

The interest on Rs. 5 lakh FD for 1 year depends on the financial institution offering it.

How to calculate an FD interest on Rs. 5 Lakhs?

The interest earned on a fixed deposit depends on the amount invested, the rate of interest, and the tenure of the deposit. You can use an online FD calculator to calculate the interest earned on your deposit. For example, Bajaj Finserv offers an online FD calculator that can help you calculate the maturity amount and interest earned on your deposit.

Can you save on income tax by investing in Fixed Deposits?

Yes, you can save on income tax by investing in tax saving fixed deposits. Under Section 80C of the Income Tax Act, 1961, you can claim a deduction of up to Rs. 1.5 lakh per annum by investing in tax-saving fixed deposits. But interest on that FD is taxable.

Do senior citizens have any benefit from investing in a 5 lakh FD?

Yes, senior citizens can avail of higher interest rates on fixed deposits as compared to regular investors.

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Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.