Many people who prefer safe investments often put a significant amount into Fixed Deposits (FDs) to receive consistent fixed returns without worrying about market changes.
In addition to regular FDs, individuals are exploring tax-saving fixed deposits (FDs) to earn higher interest rates and enjoy tax benefits.
When you put money in fixed deposits to save on taxes (Section 80C), only the amount you deposit gets the tax benefit. However, the interest you earn on it is taxable.
If you choose a joint deposit, only the first person named on the deposit gets the tax benefit under Section 80C.
Let me inform you that you can deposit at least Rs 100 in one year, and the most you can deposit is Rs 1.5 lakh.
Banks are offering the following interest rates on tax saving FD:
HDFC Bank: The biggest private bank is providing an interest rate of 7.00 percent to its customers.
Older citizens receive an extra 50 basis points. You can choose to receive interest payments monthly or quarterly.
ICICI Bank: The second biggest private bank provides a 7 percent discount on tax-saving FDs for regular citizens and 7.50 percent for senior citizens.
Depositors can choose to receive interest payments either monthly or quarterly.
Kotak Mahindra Bank: The bank gives interest just like the usual fixed deposits (FD). For a five-year FD, the private lender provides an interest rate of 6.20 percent per year.
State Bank of India (SBI): The biggest government bank provides a similar interest rate on regular fixed deposits, which is 6.50 percent per year.
You can start with a minimum amount of Rs 1,000 and deposit up to a maximum of Rs 1.5 lakh. The longest period you can keep your money deposited is 10 years.
Punjab National Bank (PNB): The second biggest state bank provides a 6.50 percent interest rate for regular citizens and 7 percent for senior citizens on tax-saving fixed deposits (APDs).
It’s important to mention that Fixed Deposits (FDs) serve purposes beyond tax saving. There are alternative methods to save on taxes as well.
