TaxSavvy

Free guide · no login · checked 4 Nov 2026

Interest from deposits and small savings

Monthly or yearly interest from bank FDs and post office schemes.

Money to start

Up to ₹5 lakh

Time it needs

Under 10 hours a week

Risk

Low

Works from home

Yes

Explore

What it is, who it suits, what it can pay, how soon, the upside and the risks.

Bank fixed deposits, recurring deposits and post office schemes such as the Monthly Income Scheme and Senior Citizens Savings Scheme pay fixed interest. It suits people who have savings and want safety over growth.

Who it suits

  • Retired people
  • Anyone with savings who cannot take risk
  • People building an emergency fund

Upside

  • Predictable
  • Bank deposits insured up to ₹5 lakh per bank by DICGC
  • Easy to start

Risks to know

  • Interest may not beat inflation after tax
  • Breaking early costs a penalty
  • Company deposits are riskier than bank deposits

What it can pay

We do not publish a number without a reliable source.

What drives it: The amount you deposit and the rate. Small savings rates are set by the government every quarter; bank rates change with RBI policy.

Time to first income

From the first interest payout, often monthly or quarterly.

Assess

Skills, money, tools, hours and registrations you need, and a five question fit check.

Skills

  • Comparing rates and terms

Money to start

Your savings; this is not a way to earn without money.

Tools

  • Bank or post office account
  • KYC

Time per week

An hour to set up.

Licences and registrations

Tick each one as you get it. Your ticks stay on this device.

Quick fit check

  1. 1.Do you have savings you will not need soon?
  2. 2.Do you value safety over high returns?
  3. 3.Are you fine with returns close to inflation?
  4. 4.Will you spread money across banks?
  5. 5.Do you want regular payouts?

Answer all five to see how well this fits you.

Run

Your first 30 days to the first rupee: set up, price, get paid, find customers, keep records.

0 of 9 steps done

  1. Days 1 to 7

    Set up

  2. Days 8 to 10

    Price it and get ready to be paid

  3. Days 11 to 24

    Find your first customers

  4. Days 25 to 30

    Record and review

Nurture

Grow and stay compliant: tax, GST, government schemes and the help that fits.

Grow it

  • Ladder deposits across dates
  • Consider debt funds or bonds after learning the risks
  • Review rates each quarter

Tax: Interest income

Return: ITR-1, or ITR-2 with capital gains

  • Interest is income from other sources, taxed at your slab rate in the year it accrues.
  • Banks deduct TDS above set limits (Sec 393 of the Income-tax Act 2025, old Sec 194A). If your total income is below the taxable limit, you can give the bank a declaration so it does not deduct.
  • Senior citizens get an extra deduction on interest under the old regime.

No GST

Interest, dividends and share trading are not supplies. No GST registration needed for this income.

Make it official

Only what this way of earning needs. Free tools are marked; services are done by a TaxSavvy CA.

Ask a SavvyInterest and dividendsTDS, declarations and the right return for interest income.See how it works →TaxSavvy serviceITR-1 for salariedSalary return filed by a CA, regime chosen for you.See how it works →Free toolTax plannerPlan this year's tax before it is due.Open the tool →

Questions

How much can I earn from interest from deposits and small savings in India?

What drives it: The amount you deposit and the rate. Small savings rates are set by the government every quarter; bank rates change with RBI policy.

How long until the first income?

From the first interest payout, often monthly or quarterly.

What do I need to start?

Your savings; this is not a way to earn without money. Registrations: PAN, Bank account and UPI.

Which ITR form do I file for this income?

ITR-1, or ITR-2 with capital gains. Interest is income from other sources, taxed at your slab rate in the year it accrues.

Do I need GST?

Interest, dividends and share trading are not supplies. No GST registration needed for this income.

Sources

Read on 4 Nov 2026. Limits, rates and fees change: check the official site before you rely on them.

This guide is general information from TaxSavvy, not a promise of income. No legal way to earn is guaranteed or instant. Avoid any offer that asks you to pay to join, recruit others or bet.

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