₹1,00,000 in a fixed deposit for 3 years at 7% (interest added every quarter) becomes ₹1,23,144. The interest earned is ₹23,144.
Deposit
₹1,00,000
Tenure
3 years
At 6.5%
₹1,21,341
At 7%
₹1,23,144
At 7.5%
₹1,24,972
Post office time deposit (7.1%)
₹1,23,508
Tax on this interest
FD interest is added to your income and taxed at your slab rate. Banks deduct TDS when interest crosses the yearly limit; you can give Form 15G or 15H if your income is below the taxable limit.