Tax saving fixed deposits: SBI vs HDFC Bank vs ICICI Bank vs Axis Bank. Which bank offers highest interest rate?
Income tax-saving fixed deposits (FDs) are among the savings options that offer tax benefits under Section 80C. An investor can claim a deduction of up to ₹1.5 lakh by investing in tax-saving FDs.
The maturity period of a tax-saver FD is 5 years. The interest earned from tax-saver FDs is taxable. Premature withdrawal cannot be done in tax-saving FDs and you cannot get a loan against tax-saver FDs.
A look at the interest rates offered by the country's largest lenders like the State Bank of India (SBI), HDFC Bank, ICICI Bank, and Bank of Baroda (BoB)
SBI offers an interest rate of 6.5% for general customers and 7% for senior citizens on its tax-saving FDs. The minimum deposit in an SBI income tax saving FD is ₹1,000 and in multiples thereof whereas the maximum deposit should not exceed ₹1,50,000 in a year.
HDFC Bank allows the opening of tax-saving deposits with a minimum amount of ₹ 100. HDFC Bank offers fixed deposits of maturity of up to 10 years. The bank is offering an interest rate of 7% on tax-saving FDs. Senior citizens get 50 basis points extra on these deposits.
ICICI Bank offers an interest rate of 7% to general customers and 7.5 % to senior citizens on FDs with maturity between five years and 10 years. The minimum amount required for opening an ICICI Bank tax-saving FD is ₹10,000, whereas the maximum deposit should not exceed ₹1,50,000 in a year.
On FDs maturing between five years and ten years, BoB offers an interest rate of 6.5 % to general customers and 7.15% to elderly people.
On FDs maturing between five years and ten years, Axis Bank gives 7% to the general public and 7.75% to senior citizens
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