Tax Saving Bank Fixed Deposit

If you have invested in the tax savings bank deposit jointly, then both the joint holders would not receive tax benefit. What this means is that the tax benefit would only accrue to the first holder.

Check the certificate

Look on the certificate to make sure it's a tax saving fixed deposit. Sometimes, the bank could make an error and treat the same as a routine fixed deposit. So, double check on the certificate when you receive the same.

No tax benefits like the NSC

Individuals often feel that this is a tax free saving instrument. While you get tax benefits under Sec 80C of the Income Tax Act, the interest earned is very much taxable. The interest would have to be added to income tax for the purpose of paying taxes.

No auto sweep

These accounts cannot be linked to saving account for auto sweep. So, if you issue a cheque do not expect the bank to auto sweep from your fixed deposit account and then sweep the same into your savings account.

Cannot withdraw the money before 5 years

For a period of 5 years you cannot withdraw the money even in case of emergency. You can only withdraw the same on death of the first holder.

Check to see if there is a PAN number

Some banks mention the PAN number on the certificates, while some do not.