When it comes to safe and secure investment options, many people prefer fixed deposits. In 2026, FDs have once again become popular as several banks and NBFCs are offering interest rates of up to 7.75% and even higher for senior citizens
FDs are a preferred choice for those looking for a guaranteed monthly income because of stable returns and low risk. If you are planning to invest Rs 25 lakh in a fixed deposit and wondering how much monthly income it can generate, here's a detailed look at the expected returns and earnings.
The monthly income from an FD mainly depends on three factors: the total FD amount, the interest rate offered and the payout option they selected.
If an investor deposits Rs 25 lakh in an FD offering 7.75% annual interest and chooses the monthly payout option, the investment can generate nearly Rs 16,145 per month before tax deductions.
Senior citizens continue to receive additional interest benefits of 0.25% to 0.75% over regular FD rates.
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Different banks offer different FD rates. At 6.5% interest, a Rs 25 lakh FD may earn around Rs 13,500 per month, and at 7.75% interest, the same FD can generate close to Rs 16,000 monthly.
In addition to this, banks often offer the highest interest rates for longer durations. For example, the interest rate on a 1-year FD may be lower than the rate offered on a 5-year FD.
Here's how much interest each bank offers on Rs 25 lakh FD to regular customers:
Bank | FD interest rate (p.a.) | Monthly income |
Axis Bank | 5.75% | 12,239 |
ICICI Bank | 6.25% | 13,329 |
HDFC Bank | 6.25% | 13,329 |
Kotak Bank | 6.50% | 13,875 |
Yes Bank | 6.65% | 14,204 |
Here's how much interest each bank offers on Rs 25 lakh FD to senior citizens
Bank | FD interest rate (p.a.) | Monthly income |
Axis Bank | 6.25% | 13,329 |
ICICI Bank | 6.75% | 14,422 |
HDFC Bank | 6.75% | 14,422 |
Kotak Bank | 7.00% | 14,971 |
Yes Bank | 7.75% | 15,300 |
How to open a Rs 25 lakh FD
Opening a Rs 25 lakh fixed deposit is a simple process and can be done either online or by visiting the bank branch.
Before investing, compare FD rates offered by different banks and NBFCs. Look for interest rates offered, monthly payout, premature withdrawal rules and other key things. Then, choose the FD type, whether you want the interest every month or at maturity. After that, choose the tenure, 1 year, 3 years, or 5 years.
Online Method
- Log in to your bank's internet banking or mobile app
- Select “Open Fixed Deposit”
- Enter amount
- Choose tenure and payout option
- Confirm details and submit
- The amount will be transferred directly from your savings account.
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Offline Method
- Visit the nearest bank branch
- Fill out the FD application form
- Submit PAN card, Aadhaar card, and bank details
- Deposit the amount through cheque or account transfer
After the FD is created, the bank issues an FD receipt or certificate containing the FD amount, interest rate, tenure, maturity date and monthly payout details.
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