Banking & Deposits4 min read
A fixed deposit's headline rate isn't what you keep — FD interest is fully taxable, and TDS can be deducted before the money even reaches you.
How it's taxed
FD interest is added to your income and taxed at your slab rate. There's no special lower rate like equity gains get. So a 7% FD in the 30% slab is really about 4.9% post-tax.
TDS and Form 15G/15H
Banks deduct 10% TDS once your interest with them in a year crosses ₹50,000 (₹1,00,000 for senior citizens). If your total income is below the taxable limit, submit Form 15G — Form 15H for seniors — to avoid TDS.
Always compare FDs on the post-tax return. For a high-slab saver, the headline rate can be misleading versus other options.
Where to go next
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