How much will ₹10 lakh in an FD be worth after 1 year?

At 7% compounded quarterly, about ₹10.72 lakh, including ₹71,859 of interest. At 7.5% it would be ₹10.77 lakh, and at 8% ₹10.82 lakh.

How much monthly interest does ₹10 lakh in an FD give?

With a monthly payout at 7%, about ₹5,833 a month. The payout does not compound, so the total interest is lower than in a cumulative FD.

Is FD interest taxable?

Yes. FD interest is added to your income and taxed at your slab rate. Banks deduct TDS when yearly interest crosses the threshold; if your income is below the taxable limit you can submit Form 15G (or 15H if you are a senior citizen) to avoid it.

Is my money in a bank FD safe?

Bank deposits are insured by DICGC up to a fixed limit per depositor per bank, covering principal and interest together. Check the current limit with DICGC; spreading larger amounts across banks keeps each deposit within the cover.

FD example

₹10 lakh fixed deposit for 1 year

At 7% a year, compounded quarterly, ₹10 lakh in an FD for 1 year grows to ₹10.72 lakh. That is ₹71,859 of interest before tax.

Change the numbers

Result

₹10,71,859

Maturity value after 1 year

Amount deposited: ₹10,00,000
Interest earned: ₹71,859
Effective yearly yield: 7.19%
Monthly interest, if paid out: ₹5,833
In today's money (6% inflation): ₹10,11,188

Quarterly compounding turns 7% into 7.19% a year, because each quarter's interest earns interest too.

FD interest is taxed at your income tax slab rate, and banks deduct TDS once a year's interest crosses the threshold, so the return you keep is lower.

₹10 lakh for 1 year at different FD rates

Interest rate	Interest earned	Maturity value
6%	₹61,364	₹10,61,364
6.5%	₹66,602	₹10,66,602
7%	₹71,859	₹10,71,859
7.5%	₹77,136	₹10,77,136
8%	₹82,432	₹10,82,432

Rates here are illustrative. FD rates differ by bank and tenure and move with the repo rate; most banks pay senior citizens a little more.

₹10 lakh at 7% for different tenures

Tenure	Interest earned	Maturity value
1 year	₹71,859	₹10,71,859
2 years	₹1,48,882	₹11,48,882
3 years	₹2,31,439	₹12,31,439
5 years	₹4,14,778	₹14,14,778
10 years	₹10,01,597	₹20,01,597

How this is worked out

A cumulative FD adds each quarter's interest to the deposit, so the next quarter's interest is earned on a larger balance. The maturity value is A = P × (1 + r/4)^(4t), where P is ₹10 lakh, r is 7% and t is 1 year.

If you choose a monthly payout instead, the interest is paid to your bank account as it accrues and does not compound. On ₹10 lakh at 7% that is about ₹5,833 a month, and you get exactly ₹10 lakh back at the end.

Tax changes the picture. Interest is added to your income and taxed at your slab rate each year, whether or not it is paid out. At a 30% slab, a 7% FD keeps roughly 4.90% after tax, below 6% inflation, which is why the inflation-adjusted value matters: ₹10.72 lakh in 1 year buys about what ₹10.11 lakh buys today.

Frequently asked questions

Results are estimates for education and planning, not financial advice.

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