Best FD Schemes: Top 5 Tax Saving Fixed Deposit Schemes

Best FD Schemes: Passive investors looking to park their money for a longer duration into a safe investment option can consider applying for a fixed deposit schemes. Several FD schemes also offer tax benefits. Income taxpayers who have opted for the old tax regime can get double benefit from fixed deposit schemes including stable returns and savings on taxes.

As the deadline for the end of financial year 2024-25 is approaching closer, many taxpayers must be looking for last minute tax saving tips, including investment in FD and other tax saving schemes.

What is a Fixed deposit scheme?

A fixed deposit (FD) scheme, also known as term deposit, is a safe investment instrument where people invest their money in lumpsum amount for a fixed duration, ranging from seven days to five years, to get assured returns. Generally, banks offer the facility of fixed deposit. Most of the people can get FD interest returns up to 8-9% for investment duration of one year.

Unlike equities and stock markets, FDs offer lower interest rates on investment, at the same time they are as volatile or risky as equities. Under this investment scheme, individuals invest their amount in a lump sump for a specific period with the bank. FD scheme tenure can be less as seven weeks to as high as 5 years. Not just public sector banks, private banks, small sector and cooperative banks also offer fixed deposit facility.

What are tax-saving FDs?

Tax saving FDs or term deposits are special saving instruments that offer individuals the benefit of saving big on their income while earning interest. People can earn income tax benefits under Section 80C of the Income Tax Act, 1961. Under this section, people can claim a tax deduction of up to Rs 1.5 lakh per year by opting for these fixed deposit schemes. Most of the banks offer tax saving FDs with a fixed tenure of 5 years.

Top 5 Tax-Saving FDs for 2025

State Bank of India Amrit Vrishti Scheme

Under its Amrit Vrishti Scheme, State Bank of India is offering interest of up to 7.25% per annum to all customers and 7.75% to senior citizen customers on fixed deposits for 444 days under its Amrit Vrishti scheme. SBI Amrit Vrishti scheme will be available for investment till 31 March 2025.

In another SBI FD scheme, known as Amrit Kalash, people can get interest rate of up to 7.10% for a duration of 400 days. Senior citizens can get an interest rate of up to 7.6% for investment under this FD scheme.

RBL Bank

RBL Bank's tax saving FD scheme offers an interest rate of up to 8% for 500 days. Senior citizens can get an interest rate of up to 8.5% in the FD scheme investment for the same duration. Individuals must note that only the first depositor of the scheme will be eligible for tax deduction under Section 80Cin case of joint deposits.

HDFC Bank FD

The private lender offers an interest rate of up to 7% on FD schemes for a duration of five years. Senior citizens can get an interest rates of upto 7.5% on FD schemes for the same duration.

DCB Bank

DCB Bank offers an interest rate of 7.4% on fixed deposits for a duration of five years. Whereas, senior citizen customers can get FD scheme interest rate of 7.9% for the same tenure.

Yes Bank

Investment in Yes Bank FD schemes for five years will offer an interest rate of 7.25% to general customers. Meanwhile, senior citizen customers can get an interest rate of 8%.