₹2,00,000 in a fixed deposit for 1 year at 7% (interest added every quarter) becomes ₹2,14,372. The interest earned is ₹14,372.
Deposit
₹2,00,000
Tenure
1 year
At 6.5%
₹2,13,320
At 7%
₹2,14,372
At 7.5%
₹2,15,427
Post office time deposit (6.9%)
₹2,14,161
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.