What Are the Tax Implications of Fixed Deposit Interest?
Fixed deposits (FDs) are one of the most popular investment options in India, offering assured returns and capital safety. While they are an excellent choice for risk-averse investors, it is essential to understand the tax implications of the interest earned on FDs. Proper knowledge of taxation helps in planning your finances better and optimising returns.
Understanding Fixed Deposits
A fixed deposit is a financial instrument offered by banks and non-banking financial companies (NBFCs), where an individual deposits a sum of money for a fixed tenure at a predetermined interest rate. The interest earned on FDs is taxable, and this taxation depends on the investor’s income tax slab rate.
Using an FD Rate Calculator
An FD rate calculator is a useful tool that helps investors calculate the interest earned on their fixed deposits based on the principal amount, interest rate, and tenure. It also provides an estimate of the maturity amount. …