A method of sub-pixel interpolation for motion compensation in video coding, the method comprising: generating first interpolated predictive data for encoding of video data based on a first interpolation filter corresponding to a fixed interpolation filter; generating second interpolated predictive data for encoding of the video data based on a second interpolation filter corresponding to an adaptive interpolation filter; selecting between the first interpolated predictive data and the second interpolated predictive data based on a rate distortion analysis using at least a bit rate and a level of distortion; encoding the video data based on the selection; and encoding a syntax element to indicate the selection, wherein a separate syntax element is defined for each sub-pixel location for the coded unit to indicate whether the first interpolation filter or the second interpolation filter should be used by a decoder for each of the sub-pixel locations, wherein selecting between the first interpolated predictive data and the second interpolated predictive data based on a rate-distortion analysis comprises: calculating a first rate-distortion cost associated with the video data if the video data is encoded via the first interpolated predictive data, wherein the first rate-distortion cost is a first difference metric; calculating a second rate-distortion cost associated with the video data if the video data is encoded via the second interpolated predictive data, wherein the second rate-distortion cost comprises a second difference metric plus a value that quantifies cost associated with encoding of filter coefficients, wherein the value comprises a number of bits needed to encode adaptive interpolation filter coefficients for the second interpolation filter; and selecting between the first interpolated predictive data and the second interpolated predictive data based on the first and second rate-distortion costs. generating first interpolated predictive data for encoding of video data based on a first interpolation filter corresponding to a fixed interpolation filter; generating second interpolated predictive data for encoding of the video data based on a second interpolation filter corresponding to an adaptive interpolation filter; selecting between the first interpolated predictive data and the second interpolated predictive data based on a rate distortion analysis using at least a bit rate and a level of distortion; encoding the video data based on the selection; and encoding a syntax element to indicate the selection, wherein a separate syntax element is defined for each sub-pixel location for the coded unit to indicate whether the first interpolation filter or the second interpolation filter should be used by a decoder for each of the sub-pixel locations, wherein selecting between the first interpolated predictive data and the second interpolated predictive data based on a rate-distortion analysis comprises: calculating a first rate-distortion cost associated with the video data if the video data is encoded via the first interpolated predictive data, wherein the first rate-distortion cost is a first difference metric; calculating a second rate-distortion cost associated with the video data if the video data is encoded via the second interpolated predictive data, wherein the second rate-distortion cost comprises a second difference metric plus a value that quantifies cost associated with encoding of filter coefficients, wherein the value comprises a number of bits needed to encode adaptive interpolation filter coefficients for the second interpolation filter; and selecting between the first interpolated predictive data and the second interpolated predictive data based on the first and second rate-distortion costs. calculating a first rate-distortion cost associated with the video data if the video data is encoded via the first interpolated predictive data, wherein the first rate-distortion cost is a first difference metric; calculating a second rate-distortion cost associated with the video data if the video data is encoded via the second interpolated predictive data, wherein the second rate-distortion cost comprises a second difference metric plus a value that quantifies cost associated with encoding of filter coefficients, wherein the value comprises a number of bits needed to encode adaptive interpolation filter coefficients for the second interpolation filter; and selecting between the first interpolated predictive data and the second interpolated predictive data based on the first and second rate-distortion costs.