How much interest can be earned on an FD of ₹25 lakhs?

The interest earned on a ₹25 lakh Fixed Deposit (FD) is not a fixed amount and depends on several key factors:

• Interest Rate: The interest rate applicable is the foremost factor affecting returns. FD rates are influenced by RBI policies and vary widely among financial institutions - public, private & small finance companies.
• Tenure: Tenure of the FD has a major impact. Generally, longer tenures may attract higher rates, but this isn't always a strict rule.
• Type of Customer: Senior citizens and women usually receive an additional interest rate compared to regular customers.
• Renewal: Auto-renewal generally gets an additional interest rate.
• Compounding Frequency: Interest can be compounded annually, semi-annually, quarterly, or monthly. The way your money is compounded ultimately affects the final interest that can be earned.
• Taxation: Additionally, one must account for tax deducted at source (TDS) beyond a certain interest earned threshold and pay applicable income tax.

The actual interest earnings on an FD of ₹25 lakhs will be determined by the applicable annualised rate, the chosen tenure, the compounding method and post-tax considerations.

It is advised to check the latest rates offered by different banks and NBFCs for the specific tenure you are considering. Online FD calculators available on their websites can be very helpful.