₹50 lakh to ₹2 crore FD: How much annual income can you earn at 6%, 7% and 8% in 2026?

In the current geopolitical environment of uncertainty, a large fixed deposit (FD) can help an individual turn surplus savings into a predictable stream of income. Such income can help combat rising inflation and protect the investor’s purchasing power.

Still, the most fundamental question that remains is: How much can you earn from an FD of ₹50 lakh, ₹75 lakh, ₹1 crore or ₹2 crore? The answer to this question primarily depends on the applicable interest rate, tenure, financial institution, and the type of investor making the investment. This is because senior citizens are offered relatively higher interest rates than other individuals.

Furthermore, based on the fixed deposit rates offered by prominent public sector banks, private banks and small finance banks, as of August 2026, the basic range of interest rates offered by private and public sector banks is generally around 6-7%, whereas small finance banks provide rates of about 7.5%–8.1% on select tenures, as per data compiled by Paisabazaar. On the other hand, foreign banks offer varying rates depending on the bank and tenure.

How much annual income can these FDs generate?

With this data in mind and the broader range of interest rates offered by prominent banks and financial institutions nationwide, the table below illustrates the annual interest income possible at three representative rates. The figures are before tax and are intended for easy comparison.

Note: Illustrative annual interest before tax. Actual income depends on the bank, tenure, applicable rate, tax, compounding and payout option.

Therefore, at 7%, a ₹1 crore fixed deposit can generate about ₹7 lakh a year. Whereas a ₹2 crore fixed deposit can generate about ₹14 lakh. On the higher side, at an 8% rate on these fixed deposits, the annual income will rise to ₹8 lakh and ₹16 lakh, respectively.

Who should consider investing in a large FD?

The decision to allocate substantial funds to fixed deposits should be made after thorough due diligence and consideration of all factors, such as age, family responsibilities, and long-term financial objectives.

These fixed deposits may suit investors seeking predictable income, capital stability, and lower exposure to market volatility, particularly retirees or those with substantial funds.

However, investors should diligently review and compare interest rates, tenures, applicable taxes, and rules on premature withdrawal before committing a large corpus. Seeking professional guidance from a certified financial advisor is also a prudent way to ensure a financially sound decision is made.

Senior citizens can earn higher FD rates

It is also vital to note that senior citizens are generally offered an additional 0.50-0.75 percentage-point advantage over regular FD rates at many reputable banks. The premium varies from one bank to another, depending on the tenure of the fixed deposit. Based on the most recent rates provided, senior-citizen FD rates broadly hover in the range of around 6.5% to 8.5%, with select small finance banks offering rates over 8% on eligible tenures.

FD interest is taxable: Know your post-tax Income

The taxation implications of fixed-income investments should also not be ignored while devising a financial plan. The fixed deposit interest is taxable under the income tax rules. The interest discussed above is gross income; post-tax earnings will be calculated after deducting taxes based on the fixed deposit holder’s individual income. For example, ₹14 lakh in interest on a ₹2 crore fixed deposit at 7-7.5% will be reduced by applicable taxes based on an individual’s total income and tax regime.

Banking institutions might also deduct TDS (Tax Deducted at Source) once the applicable threshold is crossed, depending on the fixed deposit holder’s eligibility. TDS is only a deduction at source; it does not specify any tax liability. The final tax liability on a case-by-case basis depends on an individual’s total taxable income.

In summary, when planning large investments in fixed deposits, individuals should not look only at headline interest rates. They should consider other critical aspects, such as taxation, bank diversification, liquidity, and deposit insurance limits, to balance safety, returns, and flexibility. Holistic planning and seeking professional guidance are prudent ways to ensure the fixed deposit serves its intended purpose.

Disclaimer: FD rates are subject to change and may vary by bank, tenure and depositor category. Interest-income figures are illustrative and before tax. Tax rules and TDS provisions may change; investors should verify the latest rates, tax rules and FD terms before investing.