How to Calculate Monthly Interest on FD?

Fixed Deposits (FDs)
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I want to know about monthly interest on my fixed deposit

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You can easily calculate the monthly interest payout on a Fixed Deposit (FD) if you understand the method banks use for non-cumulative FDs with monthly interest payouts.

Key Formula

For a fixed deposit with a monthly interest payout (non-cumulative FD), the interest is paid out each month rather than being compounded. The general formula to calculate the monthly interest is:

Monthly Interest = Principal×Annual Interest Rate / 12×100

Where:

  • Principal: The amount you invested
  • Annual Interest Rate: The yearly rate offered by the bank (in %)
  • 12: Number of months in a year

For example:

If you invest ₹1,00,000 in an FD with an annual interest rate of 6% and select a monthly interest payout option, your monthly interest payment would be:

Monthly Interest = 1,00,000×6 / 12×100 = 500

So, you will receive ₹500 as monthly interest from your FD.