How FD interest is calculated
Most banks compound FD interest every quarter. Maturity = P × (1 + r/4)4 × years. Senior citizens usually get about 0.5% extra.
Tax on FD interest
FD interest is added to your income and taxed at your slab rate. Banks deduct TDS when the yearly interest crosses the threshold; submit Form 15G/15H if your income is below the taxable limit.