₹50,000 in a fixed deposit for 5 years at 7% (interest added every quarter) becomes ₹70,739. The interest earned is ₹20,739.
Deposit
₹50,000
Tenure
5 years
At 6.5%
₹69,021
At 7%
₹70,739
At 7.5%
₹72,497
Post office time deposit (7.5%)
₹72,497
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.