FD vs. Overdraft

[Shobha27]

What is the difference in interest rates between the FD and the overdraft? Additionally, how does the FD's tax liability affect the net savings compared to simply paying for the interiors outright?

[Siddarth]

Right now, FDs earn you about 6.5%–7.5%, but taking out a loan against them will cost you 1%–2% more than that. Plus, don't forget that the government taxes your FD interest, so you actually take home less than you think. Honestly, if you have the cash, it’s usually cheaper and much less of a headache to pay for the interiors upfront rather than juggle a loan and taxes.