It maybe just the start of the financial year, but, investors should begin preparing early and plan their tax well in advance.
Bank Tax Savings Fixed Deposits (Fds) are one of the top investment avenues for those looking to save tax.
They offer tax benefit under Sec 80C of the Income Tax Act, though the interest earned from them is not tax free. These Tax Saving Fds come with a lock-in period of 5-years and can you cannot withdraw them under any circumstances.
Bank deposits are relatively safe, as compared to any other fixed return instruments like NCDs, company deposits etc.
Here are 6 best bank tax saving Fds for 2016:
Ratna Tax Saving Scheme
This is from RBL Bank, which was formerly called Ratnakar Bank Ltd. The 5-year deposit offers you an interest rate of 8.50 per cent and 9 per cent for senior citizens. This is the best interest from a private sector bank.
Not the best, but competitive
The DCB Tax Saver FD comes with an interest rate of 8.10 per cent, which is competitive.
The deposit is from DCB Bank, a private sector listed bank. Remember, there is a lock-in period of 5 years.
You can open a FD online, if you do not have a branch in your locality.
Well, this is not a bank, but a post office National Savings Certificate. We thought of highlighting the same, because the interest was 8.10 per cent, which very few banks are offering. A NSC certificate has a lock-in period of 5 years, just like Bank deposits.
A tax saving scheme from Lakshmi Vilas Bank
Lakshmi Tax Saver Deposit offers an interest rate of 7.80 per cent for senior citizens and individuals alike. This is from the South based Lakshmi Vilas Bank. Not the best, but, as competitive as it can get.
A State Bank of Mysore Tax Saver Scheme
SBM Tax Saver Scheme, is from State Bank of Mysore.
The interest rate for senior citizens is pretty attractive at 8.15 per cent, while for others it is at 7.75 per cent.
8.30% for senior citizens
The Tamil Nad Mercantile Bank is offering an interest rate of 8.30 per cent for senior citizens and 7.80 per cent for others.
Remember, there is a TDS that would be deducted, if the interest income crosses Rs 10,000 every year.