Avoid these mistakes while booking FD
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In summary
A Rs. 5 lakh Fixed Deposit can generate regular monthly income when you choose a non-cumulative payout option.
- Monthly payouts suit regular income needs
- Rates vary by tenure and age
- Regular rates span 6.60% to 7.75%
- Senior rates span 6.97% to 8.15%
- FD interest remains taxable under rules
- TDS may apply above prescribed thresholds
- Cumulative FDs pay interest at maturity
For Bajaj Finance Fixed Deposit, 10% TDS applies when annual interest from NBFC deposits exceeds Rs. 10,000, subject to applicable tax rules.
What is the monthly interest on a Rs. 5 lakh FD?
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The monthly interest on a Rs. 5 lakh FD depends on the annual interest rate applicable to the selected tenure and payout option.
For a simple monthly payout estimate:
Monthly interest = Deposit amount × Annual interest rate ÷ 12
For example, at an annualised monthly payout rate of 7.16%:
Rs. 5,00,000 × 7.16% ÷ 12 = approximately Rs. 2,983 per month
This calculation gives an approximate monthly payout. The actual amount depends on the FD provider's applicable rate and payout terms.
How much interest does Rs. 5 lakh earn at different interest rates?
The following table provides a simple illustration of the monthly interest from a Rs. 5 lakh FD at different annual interest rates:
| Interest rate | Approx. monthly interest on Rs. 5 lakh |
|---|---|
| 6.00% p.a. | Rs. 2,500 |
| 6.50% p.a. | Rs. 2,708 |
| 7.00% p.a. | Rs. 2,917 |
| 7.50% p.a. | Rs. 3,125 |
| 8.00% p.a. | Rs. 3,333 |
| 8.50% p.a. | Rs. 3,542 |
| 9.00% p.a. | Rs. 3,750 |
| 9.50% p.a. | Rs. 3,958 |
| 10.00% p.a. | Rs. 4,167 |
These figures are illustrative and use the annual interest rate divided by 12. Actual FD payouts may vary according to the provider's payout methodology and applicable terms.
What are the current monthly FD rates for a Rs. 5 lakh deposit?
Bajaj Finance Fixed Deposit rates, effective from 7 October 2026, vary according to tenure, customer category, and payout frequency. For a Rs. 5 lakh non-cumulative FD with monthly interest payouts, the applicable rates and approximate monthly earnings are shown below.
Customers below 60 years
| Tenure | Monthly payout rate | Approx. monthly interest on Rs. 5 lakh |
|---|---|---|
| 12–17 months | 6.80% p.a. | Rs. 2,750 |
| 18–30 months | 6.79% p.a. | Rs. 2,829 |
| 31–60 months | 7.49% p.a. | Rs. 3,121 |
Customers below 60 can earn cumulative rates of up to 7.75% p.a., while the highest monthly payout rate is 7.49% p.a.
Senior citizens
| Tenure | Monthly payout rate | Approx. monthly interest on Rs. 5 lakh |
|---|---|---|
| 12–17 months | 6.97% p.a. | Rs. 2,904 |
| 18–30 months | 7.16% p.a. | Rs. 2,983 |
| 31–60 months | 7.86% p.a. | Rs. 3,275 |
Senior citizens receive up to 0.40% p.a. additional interest and can earn cumulative rates of up to 8.15% p.a.
What is the difference between cumulative and non-cumulative FD?
The choice between cumulative and non-cumulative FD determines when the interest is received.
Cumulative FD
In a cumulative FD, interest is accumulated and paid along with the principal at maturity. There are no regular monthly interest payouts.
This option may be considered when the investor does not need periodic income and prefers to receive the accumulated amount at maturity.
Non-cumulative FD
A non-cumulative FD pays interest at a selected frequency during the tenure. Depending on the FD, the payout may be monthly, quarterly, half-yearly or annually. The principal is generally paid at maturity.
For someone specifically looking for monthly interest on Rs. 5 lakh, the non-cumulative option is the relevant FD type.
How is monthly interest on Rs. 5 lakh calculated?
The basic calculation is:
Monthly interest = Principal × Annual interest rate ÷ 12
Suppose Rs. 5 lakh is invested at a monthly payout rate of 7.16% p.a.
Monthly interest = Rs. 5,00,000 × 7.16% ÷ 12 = Rs. 2,983.33
Therefore, the approximate monthly interest is Rs. 2,983 before applicable taxes.
Over 60 months, a simple illustration would be:
Rs. 2,983.33 × 60 = approximately Rs. 1,79,000
The actual interest credited can vary slightly depending on the provider's calculation and payout terms.
How much can a senior citizen earn from a Rs. 5 lakh FD?
Senior citizens may receive an additional interest rate on eligible deposits.
At the current 31–60-month monthly payout rate of 7.49% p.a., a Rs. 5 lakh FD would generate approximately:
Rs. 5,00,000 × 7.49% ÷ 12 = Rs. 3,121 per month
Over 60 months, this represents approximately Rs. 1.87 lakh in total interest, before applicable taxes and subject to the applicable FD terms.
Is monthly FD interest taxable?
Yes. Interest earned from a fixed deposit is generally taxable as per the applicable income-tax rules.
For FY 2026–27, the TDS framework applies under the Income-tax Act, 2025. For Bajaj Finance's NBFC fixed deposits, the applicable TDS threshold is Rs. 10,000 of interest in a financial year, with TDS generally deducted at 10% when the threshold is crossed, subject to applicable conditions.
TDS is different from the final tax liability. The interest income is considered while determining the investor's overall taxable income, and the final tax payable depends on the applicable tax provisions and circumstances.
Check out different FD Rates
How does tax affect monthly interest from a Rs. 5 lakh FD?
Consider a Rs. 5 lakh FD earning approximately Rs. 2,983 per month.
The annual interest would be approximately:
Rs. 2,983 × 12 = Rs. 35,796
The applicable tax treatment and TDS depend on the deposit provider, total interest earned during the financial year and the investor's tax circumstances. Therefore, the gross monthly interest and post-tax income may differ.
What are the benefits of choosing a non-cumulative FD?
A non-cumulative FD can provide:
- Regular income: Interest can be received at the selected payout frequency.
- Predictable returns: The applicable FD rate is fixed for the selected deposit terms.
- Choice of payout frequency: Depending on the FD, interest may be received monthly, quarterly, half-yearly or annually.
- Defined tenure: The investor selects a tenure from the options offered by the FD provider.
No direct market-linked returns: FD interest is not linked to daily movements in equity or debt markets.
The suitability of a monthly payout FD depends on whether regular income or accumulated maturity proceeds better match the investor's financial requirements.
What happens if a Rs. 5 lakh FD is withdrawn before maturity?
Premature withdrawal of a Bajaj Finance Fixed Deposit is allowed subject to the applicable holding period and withdrawal conditions.
- Up to 3 months: Withdrawal is generally not permitted, except in specified exceptional circumstances.
- 3 to 6 months: Withdrawal may be allowed, but no interest is payable.
After 6 months: Interest is generally paid at a rate 2% lower than the applicable rate for the completed tenure.
Therefore, the amount received on a premature withdrawal depends on how long the FD remained invested and the applicable withdrawal rules.
Who can open a fixed deposit?
Bajaj Finance Fixed Deposit is available to eligible resident Indian individuals, including customers below 60 years and senior citizens.
Applicants generally need to complete KYC and provide PAN along with an accepted identity document, such as Aadhaar, passport, driving licence, or voter ID. Senior citizens aged 60 years and above may also qualify for additional interest benefits under the prevailing Bajaj Finance Fixed Deposit rates.
Locate to your nearest FD branch
What factors affect the monthly interest on Rs. 5 lakh?
The monthly payout mainly depends on:
- Deposit amount: A higher principal generally produces a higher interest payout at the same rate.
- Interest rate: A higher applicable annualised rate increases the monthly payout.
- Tenure: FD rates can vary across tenure bands.
- Payout frequency: Monthly, quarterly, half-yearly and annual payout options can carry different annualised rates.
- Investor category: Eligible senior citizens may receive an additional rate.
- Tax and TDS: The amount received after tax or TDS may differ from the gross interest payout.
How can you calculate the interest on a Rs. 5 lakh FD?
An FD calculator can simplify the calculation.
Typically, the required inputs include:
- Deposit amount
- Tenure
- Applicable interest rate
- Payout frequency
Investor category, where relevant
For a Rs. 5 lakh deposit, changing the tenure or payout frequency can change the applicable rate and the resulting interest income.
Conclusion
A Rs. 5 lakh Fixed Deposit can provide predictable returns and regular income when you choose a non-cumulative monthly payout option. Your actual monthly interest depends on the applicable rate, tenure, and customer category. From 7 October 2026, Bajaj Finance Fixed Deposit offers rates up to 7.75% p.a. for customers below 60 and up to 8.15% p.a. for senior citizens. Compare payout options, taxation, liquidity needs, and premature withdrawal conditions before investing.
Fixed Deposit variants
Get ROI up to
8.15% p.a.
Senior citizen
Starting with just Rs. 15,000
Get ROI up to
7.75% p.a.
Age below 60 years
Starting with just Rs. 15,000
Get ROI up to
7.75% p.a.
Minor
Starting with just Rs. 15,000
Get ROI up to
7.75% p.a.
HUF
Starting with just Rs. 15,000
Get ROI up to
7.75% p.a.
Sole proprietor
Starting with just Rs. 15,000
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Frequently Asked Questions
Overview
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 Finance 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 deposit. 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.
Can I receive monthly income from my Fixed Deposit?
Yes, you can opt for a non-cumulative FD with Bajaj Finance to receive monthly interest payouts, ideal for those seeking consistent income. Invest now.
Disclaimer
1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (BAJAJ FINANCE) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.
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