Tax saving FDs allows you to reduce your tax liability by claiming the investment amount as deduction under section 80C of the Income Tax Act. An investor can claim a maximum deduction of Rs. 1,50,000 by investing in tax-saving FDs that have a lock-in period of 5 years. Currently an interest rate of 6.0-7.65% is offered by banks on tax-saving FD schemes.
Bharat Cooperative Bank
The Bharat Cooperative Bank's Bharat Cooperative Tax Benefit Scheme is offering an interest rate of 7.65 per cent to general public whereas senior citizen will get 7.9% on a deposit amount upto Rs. 1 lakh. 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.
The bank has only yesterday reduced interest rate on its tax-saving FDs with a maturity term of 60 months to less than 120 months from 7.5% to 7.35%. Tax savings FD from the banks qualifies for tax rebate under Section 80C of the Income Tax Act.
Abhyudaya Cooperative Bank
Abhyudaya Tax Saving Scheme (ATSS) is offering an interest rate of 7.25 per cent per annum w.e.f 01.03.2017. The deposit has a lock-in of 5 years, as is the case with all tax saving FDs from banks. An investor can claim deduction of the investment amount upto Rs. 1.5 lakh in a financial year from his total taxable income as per section 80C.
Development Credit Bank
The Mumbai based Development Credit Bank (DCB) is offering an interest rate of 7.25% with a facility of quarterly compounding or quarterly interest payment option. Senior citizen will get 7.75% on the investment on an annual basis. Investment as low as Rs. 10,000 can be made upto a maximum of Rs. 1,50,000 in a financial year. It is to be noted that the tax-saving FD cannot be given as collateral to avail loan.
Tax saving fixed deposit of IDFC bank offers an interest rate of 7.2% for deposit amount less than 1 crore. The rates are effective from December 7, 2016.
Tax-free fixed deposit scheme of Yes Bank offers interest rate @ par with regular fixed deposits of 7.10%. An additional 0.50% interest is payable to senior citizens.
City Union Bank
The Tamil Nadu based City Union Bank is offering an interest rate of 6.7 per cent on its tax savings deposit for deposit amount upto Rs. 1 lakh.