Gross Interest

Gross interest is the yearly rate of interest that you receive when you invest in various vehicles such as a security or a fixed deposit. It refers to the interest before tax or before other fees are applied. Gross interest can also apply to the annual interest due on a loan. Be aware that gross interest looks attractive but net interest is more relevant as it takes into account all charges and taxes.

For instance, if you start a fixed deposit (FD) of ₹1 Lakh for 2 years and the interest is 8%, the interest of 8% is your gross interest as it doesn’t take into account the taxes you will pay on your FD earnings.

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