Certificate of Deposit

Question: Is interest income from Fixed Deposit or Certificate Of Deposit (CD) taxable or tax-exempted in your country?

Is interest income from Fixed Deposit or Certificate Of Deposit (CD) taxable or tax-exempted in your country?

Answer Yes/No with your country name. Thank you.

Answer: In the US, it depends. You can get fixed deposits or CD’s that are from municipal bond issues – if federal, they are federally tax exempt but may be taxable in your state. If state or local municipality, they are exempt from that state and local municipality. If the deposit is not backed by a bond issue, then it is taxable in the year that interest income is received, not earned.