₹10,000 in a fixed deposit for 5 years at 7% (interest added every quarter) becomes ₹14,148. The interest earned is ₹4,148.
Deposit
₹10,000
Tenure
5 years
At 6.5%
₹13,804
At 7%
₹14,148
At 7.5%
₹14,499
Post office time deposit (7.5%)
₹14,499
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.