Fixed Deposits (FDs) have always been a popular investment choice for Indian investors looking for safe, stable, and guaranteed returns. But if someone told you that you can earn Rs 2,25,000 interest on a Rs 5 lakh FD, it might sound too good to be true. Let’s break this down with real-world numbers, facts, and official data to verify if such an FD exists, or if it’s just a marketing illusion.
Best Interest is Being Offered on FD
| Feature | Details |
|---|---|
| Investment Amount | Rs 5,00,000 |
| Claimed Interest Earned | Rs 2,25,000 |
| Effective Return on Investment | 45% |
| Standard FD Interest Rates | 6.5% to 8.5% per annum |
| Likely Tenure for Claimed Returns | Around 5 to 10 years, based on compounding |
| Top FD Providers | SBI, HDFC, ICICI, Post Office, IDFC FIRST Bank |
Earning Rs 2.25 lakh interest on a Rs 5 lakh FD is absolutely possible, but it requires the right interest rate and tenure combination. With today’s best FD rates hovering around 7.5% to 8.5%, a 5 to 6-year investment is usually enough to reach that goal. Always choose FDs from reputed banks or trusted NBFCs, and keep an eye on tax implications. FDs remain one of the safest ways to grow your money, especially if planned smartly.
Is It Possible to Earn Rs 2.25 Lakh Interest on Rs 5 Lakh?
Let’s do the basic math first.
Suppose a bank offers you 7.5% interest per annum. On an FD of Rs 5 lakh for 5 years compounded annually, the maturity amount would be around Rs 7,18,000.
Total interest earned = Rs 7,18,000 – Rs 5,00,000 = Rs 2,18,000 (approx.)
So yes, it is possible to earn Rs 2.25 lakh interest on a Rs 5 lakh FD, but the tenure would need to be around 5 years or more, and the interest rate would need to be close to or above 7.5%.
see also: Now You Will Get Less Interest on FD: This Bank Has Reduced FD Rates
How Do Banks Calculate FD Interest?
Banks calculate FD interest using compound interest for most long-term deposits. The formula they use is:
A = P (1 + r/n) ^ nt
Where:
- A = Maturity Amount
- P = Principal (Investment)
- r = Annual interest rate (in decimal)
- n = Number of compounding periods per year
- t = Tenure in years
So, with quarterly compounding, a 7.5% annual rate over 5 years would compound faster than annual compounding.
Best FD Schemes in India Offering High Returns
Here are some top FD schemes currently offering attractive interest rates (as of April 2025):
IDFC FIRST Bank
- Interest Rate: Up to 7.90% p.a.
- Tenure: 400 days to 500 days
- Senior Citizen Rate: Up to 8.40%
SBI (State Bank of India)
- Interest Rate: Up to 7.10% p.a. for general citizens
- Senior Citizen Rate: 7.60% p.a.
- Tenure: 5 years and above
HDFC Bank
- Interest Rate: 7.20% for 35 months
- Senior Citizen Rate: Up to 7.70%
India Post Office Time Deposit (TD)
- Interest Rate (5 years): 7.5% p.a.
- Government-backed scheme
- Compounded quarterly
How Long Should You Invest to Get Rs 2.25 Lakh Interest?
Let’s break this down with a practical scenario:
Big Profit in FD! Great Offer from Banks on 777 Days FD, Get a Return of Up to ₹ 95,000 Bank FD Scheme
- Investment: Rs 5,00,000
- Interest Rate: 7.5% p.a.
- Tenure: 5 years
- Compounding Frequency: Quarterly
Using compounding, your total maturity would be around Rs 7,25,000.
- Interest Earned: Approx. Rs 2,25,000
That’s your magic number – 5 years at 7.5% or higher.
Should You Go for Corporate FDs?
Corporate FDs (like Bajaj Finance, Mahindra Finance, Shriram) often offer 8.5% to 9% p.a. but come with slightly higher risk compared to bank FDs. Always check CRISIL or ICRA ratings before investing in corporate FDs.
Tax Implications on FD Interest
FD interest is taxable as per your income tax slab. If your interest exceeds Rs 40,000 (or Rs 50,000 for senior citizens), TDS is deducted at 10%. Use Form 15G or 15H to avoid TDS if your total income is below the taxable limit.
Smart Tips to Maximize FD Returns
- Go for cumulative FDs (interest reinvested) to benefit from compounding.
- Choose higher tenures with better rates.
- Use laddering strategy: Split your money across multiple FDs with different tenures.
- Compare interest rates across banks and NBFCs.
- Check for penalty on premature withdrawals.
see also: Post Office New Interest Rates April 2025?
Best Interest is Being Offered on FD FAQs
Q. Can I earn Rs 2.25 lakh interest on Rs 5 lakh FD?
Yes, but only if the FD is invested for 5 years or more at an interest rate above 7.5% p.a.
Q. Which bank is giving the highest FD rate in April 2025?
IDFC FIRST Bank and some corporate FDs are offering up to 7.90% to 8.50% p.a.
Q. Is FD interest taxable?
Yes. Interest earned on FDs is fully taxable as per your tax slab. TDS applies above certain thresholds.
Q. Are corporate FDs safe?
They are relatively safe if rated highly by agencies like ICRA or CRISIL, but are not as safe as bank or Post Office FDs.
Q. How to calculate FD maturity amount?
Use online FD calculators provided by banks or the formula: A = P (1 + r/n) ^ nt
