Highest senior citizen tax-saving FD interest rate: SBI, HDFC Bank, ICICI Bank, PNB, Yes Bank

economictimes.indiatimes.com:

Through tax-saving FDs, senior individuals can use their unused funds to generate extra income along with saving tax. Additionally, FDs generate higher interest income than savings accounts and recurring deposits. By investing in these Tax-Saving Fixed Deposits, senior citizen investors can deduct up to Rs 1.5 lakh per year. Senior citizens usually receive slightly higher interest rates from banks. A senior citizen tax-saver FD can be opened by anyone 60 years of age or older. Interest rates on these tax saving fixed deposits differ depending on the bank. Here is a comparison of top banks offering tax saving fixed deposit with best interest rates.

Tax saving FD features Tenure of tax saving FD is 5 years. This provision ensures that your investments maintain financial discipline and that the FD is not cashed in. Premature withdrawal, partial withdrawal and loan & overdraft facility against Fixed Deposit facility is not available. Taxation on interest Interest generated on any fixed deposit, including tax-saving fixed deposits, is taxable according to the investor's tax bracket. Under section 80TTB of the Income-tax Act, senior citizens can deduct up to Rs 50,000 from the total interest earned on fixed deposits within a fiscal year. Banks would charge tax deducted at source (TDS) on this income if the amount of interest credited in a financial year exceeds Rs 50,000. TDS is currently reduced by 10% under section 194A of the Income-tax Act. Senior citizens can use form 15H to claim tax exemption under the interest earned in their fixed deposits.