Best Tax-Saver Fixed Deposits For Senior Citizens

A fixed deposit is an investment option offered by banks and non-banking financial companies (NBFCs) to help you grow your wealth safely and securely. If you want to save money on taxes, choose a Tax Saver FD and take advantage of the Fixed Deposit Income Tax Exemption. Some banks offer senior citizens good interest rates on tax-saving fixed deposits. This is a comparison of banks that provide the best tax-saving FD interest rates.

What is Tax- saving FD?

A tax saving FD is a form of fixed deposit that allows a person to claim a tax deduction under Section 80C of the Indian Income Tax Act of 1961. The tax benefit is only accessible to the first holder if you choose a joint method of holding. The tax-saving fixed deposit has a 5-year maturity period and no early withdrawals are permitted.

Features

• Section 80C of the Income Tax Act of 1961 provides for a tax exemption of up to Rs.1.5 lakh.
• A five-year lock-in term, as well as interest rates that remain constant during the five-year period
• A Tax Saving FD does not allow for early withdrawals, overdrafts, or lending services.
• A Tax Saving Fixed Deposit does not have an auto-renewal feature.
• The ability to receive interest payments at your leisure, with the option of monthly or quarterly payments, or to reinvest the principle amount.

Banks offering best tax-saver fixed deposit interest rates

DCB Bank Limited-

DCB Bank offers seniors 8.1% interest on tax-saving FDs.

Axis Bank Ltd.

Axis Bank provides 7.75% interest on these FDs for senior citizens with a 5-year lock-in period.

Bank IndusInd-

Indusind Bank is offering 7.75% interest on tax-saving FDs with a 5-year lock-in period.

AU Small Finance Bank -

AU Small Finance Bank is providing 7.70% interest on tax-saving FDs with a 5-year lock-in term.

HDFC Bank-

HDFC Bank is currently offering 7.50% return on tax-saving FDs to senior citizens with a five-year lock-in period.

Tax benefits

Under Section 80C of the Income-Tax Act of 1961, a depositor of tax-saving fixed deposits can claim a tax deduction of up to Rs 150,000. Individuals and Hindu Undivided Families (HUF) are both eligible for a section 80C deduction. This tax break is offered to everyone, including non-resident Indians and older citizens. Please keep in mind that the interest you earn on this fixed deposit is not tax deductible. The interest payment is subject to tax deducted at source (TDS) in accordance with the current Income Tax Act.