₹2,00,000 in a fixed deposit for 5 years at 7% (interest added every quarter) becomes ₹2,82,956. The interest earned is ₹82,956.
Deposit
₹2,00,000
Tenure
5 years
At 6.5%
₹2,76,084
At 7%
₹2,82,956
At 7.5%
₹2,89,990
Post office time deposit (7.5%)
₹2,89,990
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.