Investing a substantial amount like ₹5 Crores can be a challenging endeavor. Fixed Deposits (FDs) present a secure and reliable option for many investors seeking predictable growth.
With such a significant investment, it's vital to understand your potential ₹1 Crore FD interest per month. Comparing offerings from banks and Non-banking Financial Companies (NBFCs) allows investors to make informed decisions, maximising returns on their FD.
Additionally, opting for the monthly interest payout option ensures investors earn regular returns on their investment, adding to the attractiveness of FDs.
The potential monthly returns depend on the fixed deposit interest rate offered by banks and NBFCs. Here’s a table illustrating the estimated ₹1 Crore FD interest per month across various interest rates for a tenor of 5 years:
Disclaimer: The above-mentioned interest rates are only indicative.
Using an FD calculator, you can experiment with different interest rates, tenors, and deposit amounts to determine which terms work best for you. Estimating the maturity value of a fixed deposit can be complex, considering its intricate nature and the multitude of factors involved in the calculation process.
To utilise an FD calculator effectively, begin by inputting the deposit amount, followed by the interest rate. Then, specify the tenor in either months or years, indicating the duration you wish the FD to remain active. Finally, click the ‘Calculate’ button to generate estimates for the maturity amount and total interest accrued.
● Tenor
The longer you commit your funds to the FD, typically the higher the interest rate you'll receive. Banks typically offer higher returns for longer commitments. For example, a 5-year FD generally yields a higher interest rate compared to a 1-year FD for the same deposit amount.
● Interest Rates
Fixed deposit interest rates represent the annual percentage rate earned on your deposit and are influenced by several factors. The Reserve Bank of India (RBI) sets the benchmark interest rates, which influence the rates offered by banks and NBFCs. Every issuer sets its own FD interest rates; banks usually offer lower rates than NBFCs.
● Deposit Amount
While not directly impacting the interest rate itself, the amount you deposit can influence your overall returns. Larger deposits can sometimes qualify for special FD schemes with slightly higher interest rates offered by some institutions.
● Payout Frequency
The frequency of interest payout on your FD impacts your earnings. There are three main options:1. Monthly: Interest credited monthly provides regular income, though the total interest earned might be slightly lower2. Quarterly: Interest credited every three months offers a slightly higher overall return3. Half-yearly: Interest on your deposit amount will be credited every six months throughout the duration of the FD4. Maturity: Interest and principal paid at FD maturity yield the highest return, but restrict access to earned interest until maturity
● Investor’s Age
Age plays a significant role in determining FD rates, with seniors aged 60 and above often receiving preferential rates compared to those under 60. In some cases, issuers may offer additional interest rates for super senior citizens (aged over 80 years).
Understanding the interplay of these factors is crucial. For example, opting for a longer tenor with a higher interest rate can potentially lead to higher overall returns. Additionally, selecting a less frequent payout option, such as quarterly or at maturity, may also contribute to increased earnings.
Investing a significant sum like ₹1 Crore requires careful planning. Understanding the factors influencing your FD interest rate can empower you to make an informed decision.By comparing interest rates, negotiating for better returns, and choosing the ideal FD scheme, you can maximise the potential returns. Remember, security, flexibility, and potential returns should all be carefully weighed when making your final choice.
Disclaimer: This content is part of a marketing initiative. No TNIE Group journalists were involved in the creation of this content.