Fixed Deposit more than 5 years

What is a 5-year fixed deposit?

A 5-year fixed deposit is a type of investment where you deposit a lump sum of money with a bank or other financial institution for a fixed period of 5 years, during which the interest rate remains fixed.

Is the interest earned on a 5-year fixed deposit taxable?

Yes, the interest earned on a 5-year fixed deposit is usually taxable. The specific tax treatment depends on the laws of your country. In most cases, the interest is considered part of your taxable income and must be reported on your tax return.

How is the interest on fixed deposits taxed?

The interest earned is usually added to your total income and taxed at your applicable income tax rate.

Can I claim deductions for the principal amount invested in fixed deposits?

No, the principal amount invested in fixed deposits is not eligible for tax deductions.