7 banks that offer highest interest rate on tax saving FDs

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Only 9-days are left to plan your tax and save on your tax liabilities for assessment year 2013-2014. Bank tax savings deposits offer benefits under section 80C of the Income Tax Act and are excellent instruments to save tax. Here are a few tax saving fixed deposits from various banks that offer maximum interest.

Bharat Cooperative Bank

The Bharat Cooperative Bank's Bharat Deposit Tax Benefit Scheme is offering an interest rate of 10 per cent on its tax saving fixed deposit. Tax savings FD from the banks qualifies for tax rebate under Section 80C of the Income Tax Act. The Bank is a multi-state scheduled bank.

Abhyudaya Cooperative Bank

Abhyudaya Tax Saving Scheme is offering an interest rate of 9.75 per cent per annum on its tax savings scheme. A similar rate is also applicable for senior citizens. The deposit has a lock-in of 5 years, as is the case with all tax saving FDs from banks.

City Union Bank

The Tamil Nadu based City Union Bank is offering an interest rate of 9.50 per cent on its tax savings deposit. Pretty decent considering that interest rates are falling and you would be locking your deposit at 9.50 per cent for 5 years.

Development Credit Bank

The Mumbai based Development Credit Bank (DCB) is offering an interest rate of 9.30 per cent for its Tax Savings FD.

Tamilnad Mercantile Bank Ltd

The Tamilnad Mercantile Bank Tax Savings FD comes with an interest rate of 9.25 per cent. The Bank offers monthly interest, quarterly interest, half-yearly interest (quarterly compounded), annual interest (quarterly compounded) and Cumulative interest - based on investor needs.

State Bank of Mysore

The SBM TAX SAVER Deposit offers an interest rate of 9.10 per cent. The rates are the best amongst public sector banks.

Punjab and Sind Bank

Punjab and Sind Bank, like State Bank of Mysore is a public sector bank. The Punjab and Sind Bank PSB Fixed Deposit Tax Saver Scheme offers an interest rate of 9.05 per cent per annum.

Read more about: tax saving fds
Story first published: Friday, March 22, 2013, 8:43 [IST]
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