₹50,000 in a fixed deposit for 3 years at 7% (interest added every quarter) becomes ₹61,572. The interest earned is ₹11,572.
Deposit
₹50,000
Tenure
3 years
At 6.5%
₹60,670
At 7%
₹61,572
At 7.5%
₹62,486
Post office time deposit (7.1%)
₹61,754
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.