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Top 10 Banks Offering Highest Returns On Tax Saving FDs Maturing In 5 Years

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Investing in tax-saving fixed deposits is the most popular tax-saving instrument under section 80C among the general public and older citizens. The prevalence of tax-saving fixed deposits comes from the fact that interest rates payable on a monthly or quarterly basis can be reinvested and are unaffected by market fluctuations, and hence one can benefit from the income tax deduction under Section 80C of the Income Tax Act by investing up to Rs.1.5 lakh in a tax-saving fixed deposit scheme. The most important thing to remember while investing in a tax-saving fixed deposit is that the interest generated is taxable according to the individual's tax bracket, which results in a TDS deduction.

 

By filing Form 15G for regular citizens or Form 15H for senior persons, TDS applicable on the interest amount can be avoided. While investing in tax-saving fixed deposits, keep in mind that deposits in banks are insured up to Rs 5 lakhs by the DICGC, however, deposits in corporates or NBFCs are not. As a result, search for NBFCs and HFCs that are rated 'AAA' by top rating agencies such as CRISIL, ICRA, and others. Tax-saving deposits are locked-in for five years, therefore no premature withdrawals are permitted. So, here are the top 10 banks now offering the highest interest rates on tax-saving fixed deposits in the market for long-term investors.

Top 10 Public Sector Banks Promising Highest Returns On Tax Saving FDs

Top 10 Public Sector Banks Promising Highest Returns On Tax Saving FDs

Here are the top 10 public sector banks offering the best returns on tax saving deposits of less than Rs 2 crore with a 5-year maturity.

BanksRegular Interest rates p.a.Senior citizensW.e.f.
State Bank of India5.40%6.20%08.01.2021
Bank of Baroda5.25%5.75% - 6.25%16.11.2020
Union Bank of India5.40%5.90%01.09.2021
Punjab & Sind Bank5.30%5.80%16.09.2021
Canara Bank5.25%5.75%09.08.2021
Punjab National Bank5.25%5.75%01.08.2021
Indian Bank5.25%5.75%05.11.2021
Indian Overseas Bank5.20%5.70%09.11.2020
Bank of India5.05%5.55%01.08.2021
UCO Bank5.05%5.55%16.11.2021
Source: Bank Website

Top 10 Private Sector Banks Offering Highest Returns On Tax Saving FDs
 

Top 10 Private Sector Banks Offering Highest Returns On Tax Saving FDs

The top ten private sector banks with the highest returns on tax saving deposits of less than Rs 2 crore maturing in 5 years are shown below.

BanksRegular Interest rates p.a.Senior citizensW.e.f.
Nainital Bank6.35%6.35%10th September 2021
RBL Bank6.30%6.80%1st September 2021
Yes Bank6.25%7.00%03rd November 2021
IndusInd Bank6.00%6.50%July 23rd, 2021
IDFC First Bank6.00%6.50%23rd November 2021
DCB Bank5.95%6.45%22nd November 2021
Karur Vysya Bank5.75%5.75%08.10.2021
South Indian Bank5.65%6.15%8th October 2021
Axis Bank5.40%6.05%10/11/2021
ICICI Bank5.40%5.90%04.12.2021
Source: Bank Website

Top 10 Small Finance Banks Providing Highest Returns On Tax Saving FDs

Top 10 Small Finance Banks Providing Highest Returns On Tax Saving FDs

The top ten small finance banks with the best tax saving deposits of less than Rs 2 crore maturing in the next five years are as follows.

BanksRegular Interest rates p.a.Senior citizensW.e.f.
Fincare Small Finance Bank6.75%7.25%25th October 2021
Suryoday Small Finance Bank6.75%7.00%September 09, 2021
Jana Small Finance Bank6.50%7.00%07/05/2021
Ujjivan Small Finance Bank6.25%7.00%09.12.2021
North East Small Finance Bank6.25%6.75%19th April 2021
Utkarsh Small Finance Bank6.00%6.50%July 01, 2021
Equitas Small Finance Bank5.75%6.25%1st October 2021
AU Small Finance Bank5.75%6.25%14th October 2021
Shivalik Small Finance Bank5.75%6.00%December 1st, 2021
ESAF Small Finance Bank5.25%5.75%01/12/2021
Source: Bank Website

Story first published: Saturday, December 11, 2021, 12:47 [IST]
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