Tax saving fixed deposit – Interest rates offered by key banks and investment details

During this time of year, many investors look for last-minute tax-saving opportunities in order to save even more money. There are special avenues available in the market for the same, with tax saving fixed deposits (FD's) regarded as one of the safest saving options. The money invested in these is completely safe, and the returns are guaranteed.

Tax Saving FD is regarded as one of the safest saving option

Tax Saving FD is a type of Fixed Deposit that allows investors to deduct expenses under Section 80C of the Income Tax Act. By investing in tax-saving fixed deposits, investors can claim a maximum deduction of Rs 15 lakh.

In the case of joint accounts, however, only the first holder is eligible for a deduction under the Income Tax Act. These tax-saving FDs have a five-year minimum lock-in period. Investors can open tax-free FD accounts online or in person at a bank branch.

Tax saving Fixed Deposits are similar to other Fixed Deposits in that the returns are fixed for the term of the FD. Investors, however, cannot make premature or partial withdrawals from tax-advantaged deposits.

Also Read: Venugopal Dhoot granted interim bail in loan fraud case by Bombay High Court

Eligibility

Individuals and HUFs (Hindu Undivided Families) are eligible to participate in the tax deposit fixed deposit (FD) scheme. A tax-saving FD can be opened in a single or joint account.

Interest Rates offered on Tax Saving FD’s by different banks

Different banks offer different interest rates on taxsaving FDs. Interest rates for Indian citizens and HUFs differ depending on the bank. Interest rates are higher for senior citizens and bank employees.

Interest on income tax-saving deposits is paid either monthly or quarterly. If the investor so desires, the interest earned can be reinvested.

Taxability

Interest is taxable, so it is deducted at the source and added to income.

Who should invest?

Those seeking a shorter lock-in period as well as a guaranteed return with a tax-saving option should consider investing in tax-saving fixed deposits.

Also Read: Google to lay off 12,000 employees

Keep watching our YouTube Channel ‘DNP INDIA’. Also, please subscribe and follow us on FACEBOOK, INSTAGRAM, and TWITTER