₹10,00,000 in a fixed deposit for 1 year at 7% (interest added every quarter) becomes ₹10,71,859. The interest earned is ₹71,859.
Deposit
₹10,00,000
Tenure
1 year
At 6.5%
₹10,66,602
At 7%
₹10,71,859
At 7.5%
₹10,77,136
Post office time deposit (6.9%)
₹10,70,806
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.