Are you wondering how much interest you will get on ₹1,00,000 in the bank and the best way to withdraw that interest without facing unnecessary taxes or penalties? Whether you’re a student starting your savings journey, a working professional planning investment, or a retiree seeking a steady income, understanding bank interest earnings and withdrawals is crucial.
In this article, we’ll break down the interest you can earn on ₹1,00,000, explain how different banks and tenures affect your returns, and show you the smartest ways to withdraw your interest. We’ll also discuss tax implications, official rules, and tips to maximize your earnings, all in a friendly and easy-to-understand way.
How Much Interest Will You Get on ₹1,00,000?
| Key Information | Details |
|---|---|
| Principal Amount | ₹1,00,000 |
| FD Interest Rates (March 2025) | 6.50% to 7.90% (varies by bank & tenure) |
| Monthly Interest Example | ₹1,00,000 @ 8.5% p.a. = Approx. ₹708.33/month |
| Tax Deduction Threshold (TDS) | Interest above ₹40,000 (₹50,000 for seniors) attracts 10% TDS |
| Large Cash Withdrawal TDS | 2% TDS on withdrawals > ₹1 crore (₹20 lakh if no ITR filed) |
| Exemption Forms | Submit Form 15G/15H to avoid TDS if income is below taxable limit |
| Best Withdrawal Mode | Non-cash: Cheques, Net Banking, RTGS, NEFT, IMPS |
Knowing how much interest you can earn on ₹1,00,000 and the correct way to withdraw bank interest helps you make smarter financial decisions. Whether you’re saving for the future, managing business cash flow, or enjoying retirement, understanding tax rules, interest payout options, and withdrawal methods can maximize your earnings while keeping you tax-compliant.
How Much Interest Will You Earn on ₹1,00,000 Deposit?
The amount of interest you earn depends primarily on three factors:
- Interest Rate offered by the bank.
- Type of Deposit – Fixed Deposit (FD), Savings Account, or Recurring Deposit.
- Tenure of your deposit.
Example: Fixed Deposit Interest Rates (March 2025)
Let’s take a look at some of the popular banks’ FD rates:
| Bank | Tenure | General Interest Rate | Senior Citizen Rate |
|---|---|---|---|
| HDFC Bank | 1 year to < 15 months | 6.60% | 7.10% |
| HDFC Bank | 18 months to < 21 months | 7.25% | 7.75% |
| ICICI Bank | 400 days – 500 days | 7.90% | 8.40% |
| IDFC First Bank | 1 year – 3 years | 7.50% | 8.00% |
Example Calculation: If you invest ₹1,00,000 for one year at 7.5% interest, you will earn:
₹1,00,000 × 7.5% = ₹7,500 per year
Some banks also offer monthly interest payouts. For instance:
₹1,00,000 @ 8.5% p.a. interest = Approx. ₹708/month payout.
see also: HDFC and PNB Bank Launch Special Fixed Deposit Schemes
Tax Implications on Bank Interest
Savings Account Interest:
- Exemption up to ₹10,000/year under Section 80TTA.
- Interest beyond ₹10,000 is taxable under your income slab.
Fixed Deposit Interest:
- No specific exemption.
- Banks deduct 10% TDS if yearly interest exceeds ₹40,000 (₹50,000 for seniors).
Avoiding TDS:
If your income is below the taxable limit:
- Submit Form 15G (for individuals below 60).
- Submit Form 15H (for senior citizens).
How to Withdraw Bank Interest Smartly
Savings Account Interest:
- Automatically credited to your savings account quarterly.
- You can withdraw anytime via ATM, Net Banking, UPI, or Cheque.
Fixed Deposit Interest:
- Choose between Cumulative FD (interest paid at maturity) or Non-Cumulative FD (monthly/quarterly payouts).
- Best withdrawal modes:
- Online Transfer (NEFT, RTGS, IMPS)
- Cheque
- UPI or Mobile Banking
Large Cash Withdrawals: Beware of TDS!
Under Section 194N of the Income Tax Act, cash withdrawals above certain limits attract TDS:
| ITR Filed Status | Withdrawal Limit | TDS Rate |
|---|---|---|
| ITR filed for last 3 years | Up to ₹1 crore/year | No TDS |
| Exceeding ₹1 crore/year | 2% TDS | |
| ITR NOT filed for last 3 years | ₹20 lakh – ₹1 crore/year | 2% TDS |
| Above ₹1 crore/year | 5% TDS |
Pro Tip: Avoid withdrawing large cash amounts. Prefer online transfers to stay tax-compliant.
How Professionals & Businesses Can Benefit
Professionals, SMEs, and businesses often have to deal with large sums. Here’s how you can manage:
- Plan FD maturity dates to meet your cash flow requirements.
- Opt for monthly interest payouts to create a steady income stream.
- Use multiple bank accounts/FDRs to stay under TDS and withdrawal limits.
- Submit proper tax forms (Form 15G/15H) to avoid unnecessary deductions.
see also: How Much Interest Will Be Received on 400 Days FD if ₹1,00,000 is Invested?
Interest Will You Get on ₹1,00,000 FAQs
Q1. How much interest will I get on ₹1,00,000 for 1 year?
It depends on the bank. For instance, at 7.5% interest, you’ll earn ₹7,500/year.
Q2. How can I withdraw interest monthly from a Fixed Deposit?
Choose a Non-Cumulative FD at the time of opening. The interest is transferred monthly to your savings account.
Q3. Is the interest earned on ₹1,00,000 taxable?
Yes. Savings account interest up to ₹10,000/year is tax-free. FD interest above ₹40,000 (₹50,000 for seniors) attracts 10% TDS.
Q4. How to avoid TDS on FD interest?
Submit Form 15G (individuals under 60) or Form 15H (seniors) if your total income is below taxable limits.
Q5. What is the safest way to withdraw large interest earnings?
Always use Net Banking, Cheques, RTGS, NEFT, or IMPS to withdraw large amounts to avoid TDS and comply with tax laws.
