Fixed deposits (FDs) are one of the most popular and secure investment options in India. They offer guaranteed returns over a fixed tenure, making them an ideal choice for risk-averse investors. When you invest in a fixed deposit, you have the option to receive interest at different intervals, such as monthly, quarterly, half-yearly, or annually. This article focuses on understanding how much monthly interest you can earn on a fixed deposit of Rs. 20,000.

What is a fixed deposit?

A fixed deposit is a financial instrument offered by banks and non-banking financial companies (NBFCs) where you can deposit a lump sum of money for a fixed tenure at a predetermined interest rate. Unlike savings accounts, FDs offer higher interest rates, and the returns are guaranteed. Once you deposit the money, it earns interest over the chosen tenure, and you can either receive the interest regularly or reinvest it.

FD Monthly Interest Pay-out for Deposits of Rs. 20,000

When you invest Rs. 20,000 in a fixed deposit (FD) with a monthly interest payout option, the interest earned varies depending on the interest rate and tenure. Below is a table showing the estimated monthly interest for different tenures.

Here are the monthly interest amounts for a Rs. 20,000 Fixed Deposit at various interest rates:

What monthly interest can be earned on a Rs. 20,000 FD?

Fixed deposits (FDs) are widely regarded as safe investment options with minimal risk. When prioritising the safety of capital, FDs often come to mind first. In the case of corporate FDs, the interest rate is fixed and remains consistent throughout the entire tenure, often offering comparatively higher returns. For example, if you invest Rs. 20,000 in a five-year FD with Bajaj Finance, you might benefit from a relatively higher interest rate. Depending on your financial goals, you can choose a tenure ranging from 12 to 60 months, making corporate FDs adaptable for both short-term and long-term objectives.

Following are the calculations of interest earnings for Rs. 20,000 fixed deposit for senior citizens and citizens aged below 60

When investing in a Rs. 20,000 fixed deposit, both senior citizens and individuals aged below 60 can expect varying interest earnings depending on the tenure and interest rate. Below is a detailed table showing the potential interest earnings for different tenures.

Fixed deposit interest for citizens aged below 60:

Fixed deposit interest for senior citizens:
 

For accurate calculations, you can use a fixed deposit calculator to estimate your earnings based on different tenures and interest rates.

Documents required for booking an Bajaj Finance FD

PAN Card and Any KYC document (Aadhaar card/passport/driving licence/voter ID)

Reinvestment or Cumulative FD

A reinvestment or cumulative fixed deposit option allows interest to be compounded, thereby increasing the overall returns. Unlike non-cumulative FDs, where interest is paid out periodically, cumulative FDs pay the interest along with the principal at maturity. This option is ideal for those looking to grow their savings over time.

Conclusion

Investing Rs. 20,000 in a fixed deposit can be a secure way to earn regular interest income. The monthly interest you receive depends on the interest rate, which varies across banks and NBFCs. By comparing interest rates and understanding the factors that influence your returns, you can choose the best fixed deposit option to meet your financial needs. Remember to consider the tax implications of your interest income and make informed decisions to maximise your returns.