Tax-saving fixed deposits with up to 7% interest rate: Top banks offering best rates on tax-saving FDs
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Tax-saving FD details
There is a five-year lock-in period on this FD account, during which time the invested cash cannot be withdrawn. For those wishing to avoid taxes and receive a set return on their investment, this is a feasible alternative because the interest generated is taxable and the interest rate differs between banks. The only entities eligible to open this tax-saving fixed deposit are individuals and Hindu Undivided Families. One may make deposits under a single or joint name. The first holder is eligible for the Income Tax advantage, per standards set forth by the Government of India.
Tax Saving FD Benefits
According to Bank of Baroda, below are the benefits of investing in tax saving FDs.
Tax savings: The principal amount invested as a tax saving FD is allowed as a deduction to the first holder of the FD under Section 80C of the Income Tax Act. The maximum deduction allowed in a financial year is Rs. 1,50,000.
No TDS if Form 15H/15G submitted: This FD is subject to TDS rules and regulations. The interest earned on this deposit is taxable. However, if your income is not liable to tax, you can submit a Form 15H/15G and the bank won’t deduct TDS on your interest.
Beneficial rate to senior citizen: Senior citizens can get a better rate of interest on such deposits. Bank of Baroda pays 0.5% over and above the tax saving FD rates to senior citizens. This is available for deposits below Rs. 1 crore.
Nomination facility available: It is possible to set up nomination for the tax saving FD.
Branch transfer: The tax saving FD can be transferred from one branch to another branch at the request of the
