What is 7 percent interest on ₹1 lakh FD?

If the interest rate offered on a ₹1 lakh fixed deposit (FD) is 7% per annum, the interest earned, with a simple interest formula, will be:

Interest Rate: 7% per annum

FD Principal Amount: ₹1,00,000

Interest Calculation:

• (Principal x Interest Rate x Tenure)/100

For 1-year tenure:

• 1,00,000 x 7% x 1 = ₹7,000

For a 3-year tenure:

• Annual Interest = 1,00,000 x 7% = ₹7,000
• Total for 3 years = ₹ 7,000 x 3 = ₹21,000

For senior citizens and women investors:

• An additional 0.5% additional interest rate (it is usually between 0.25% to 0.50% or even more)
• Annual interest on ₹1 lakh FD = 7.5% x 1,00,000 = ₹7,500

The annual interest earned on a ₹1 lakh FD with a 7% rate is ₹7,000. For senior citizens, this can be ₹7,500.

For FDs that use compounding, the returns would be higher, based on the frequency at which the financial institution compounds the interest rate. For exact maturity amounts for this instance, using the compound interest formula or it is advisable to use an FD calculator.