₹5,00,000 in a fixed deposit for 1 year at 7% (interest added every quarter) becomes ₹5,35,930. The interest earned is ₹35,930.
Deposit
₹5,00,000
Tenure
1 year
At 6.5%
₹5,33,301
At 7%
₹5,35,930
At 7.5%
₹5,38,568
Post office time deposit (6.9%)
₹5,35,403
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.