Deferred interest accounts pay interest at fixed intervals. Some examples are certificates of deposit (CDs), money market certificates, and some U.S. Treasury bonds.
One Year or Less
Interest that is paid in intervals of one year or less is included in taxable income when it is received or when the taxpayer could receive it (that is, when it is credited to the account) without paying a substantial penalty.
If an account matures in one year or less, such as a six-month certificate, and provides a single interest payment at maturity, then the interest is taxable when the account matures and the taxpayer receives the interest.
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