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  1. Not sure about India, since your ID states you are in India.
    But in the US, you need to pay taxes on interest earned in taxable accounts such as savings.

  2. If you are from India which I think you are, then interest earned on Savings a/c, FD, etc are added to your total income as income from other sources and taxed according to the tax slab you fall.

    Current tax slabs are

    0 to 1,80,000No tax
    1,80,001 to 5,00,00010%
    5,00,001 to 8,00,00020%
    Above 8,00,00030%

  3. most people wont make enough off the crappy interest rates in those accounts to be taxable. If you have enough money that would generate the interest then it wont be sitting in a savings account for less than 1%

  4. Interest on savings account is a source of interest income and will be considered as a part of income earned in a financial year while computing total income. while computing income tax total income is taken as a base figure and calculations are made taking all allowable deductions made into consideration.