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Top 10 Banks Promising Best Interest Rates On Tax Saving Fixed Deposits

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When it comes to taking advantage of the tax deduction under Section 80C of the Income Tax Act for an amount up to Rs 1.5 lakh in a financial year, tax saving fixed deposits are the wisest option. Although fixed deposits have a maturity period ranging from 7 days to 10 years, tax saving deposits come with a 5-years lock-in period, which debt investors should be aware of. Tax-saving depositors should keep in mind, however, that interest received on tax-saving fixed deposits is taxed based on the investor's tax bracket. When interest payable on fixed deposits surpasses Rs 40,000 for non-senior citizens and Rs 50,000 for senior citizens in a financial year, TDS (tax deducted at source) would be levied.

 

However, elderly folks can claim a deduction of up to Rs. 50,000 on interest received on tax-saving fixed deposits under Section 80TTB by filling out Form 15H and non-senior citizens can submit Form 15G to avoid TDS. Here are the top 10 public, private, and small finance banks that are now providing the best interest rates on tax saving fixed deposits of less than Rs 2 Cr for depositors who have a long-term financial objective and are willing to invest for a 5-year lock-in period without making a premature withdrawal and secure their deposits up to Rs 5 lakhs under the DICGC insurance scheme.

Top 10 Public Sector Banks With Highest Interest Rates On Tax Saving FDs In 2021

Top 10 Public Sector Banks With Highest Interest Rates On Tax Saving FDs In 2021

Here are the top 10 public sector banks based on our own research, that are currently offering the highest interest rates on tax saving fixed deposits.

BanksRegular Interest RatesInterest rates for senior citizensW.e.f.
Union Bank of India5.40%5.90%01/09/2021
State Bank of India5.30%5.80%8th Jan 2021
Punjab & Sind Bank5.30%5.80%16/09/2021
Bank of Baroda5.25%5.75%16.11.2020
Canara Bank5.25%5.75%09.08.2021
Indian Bank5.25%5.75%05.11.2021
Indian Overseas Bank5.25%5.75%09.11.2020
Punjab National Bank5.25%5.75%01.08.2021
Bank of India5.05%5.55%01.08.2021
UCO Bank5.05%5.55%10.01.2021
Source: Bank Websites

Top 10 Private Sector Banks Offering Highest Interest Rates On Tax Saving Fixed Deposits
 

Top 10 Private Sector Banks Offering Highest Interest Rates On Tax Saving Fixed Deposits

Based on higher interest rates only, here we have compiled the top 10 private sector banks that are currently promising the best interest rates on tax saving fixed deposits.

BanksRegular Interest RatesInterest rates for senior citizensW.e.f.
Nainital Bank6.35%6.35%10th September 2021
RBL Bank6.30%6.80%September 01, 2021
Yes Bank6.25%7.00%3rd November 2021
IndusInd Bank6.00%6.50%July 23rd, 2021
DCB Bank5.95%6.45%17th August 2021
South Indian Bank5.65%6.15%8th October 2021
Axis Bank5.40%6.05%10/11/2021
Dhanlaxmi Bank5.40%5.90%01.08.2021
Karnataka Bank5.40%5.80%01.06.2021
ICICI Bank5.35%5.85%Oct 21, 2020
Source: Bank Websites

Top 10 Small Finance Banks Promising Highest Interest Rates On Tax Saving Fixed Deposits

Top 10 Small Finance Banks Promising Highest Interest Rates On Tax Saving Fixed Deposits

Here are the top 10 small finance banks that are currently offering the highest interest rates on tax saving fixed deposits of less than Rs 2 Cr.

BanksRegular Interest RatesInterest rates for senior citizensW.e.f.
Fincare Small Finance Bank6.75%7.25%25th October 2021
Suryoday Small Finance Bank6.75%7.00%September 09, 2021
North East Small Finance Bank6.50%7.00%19th April 2021
Jana Small Finance Bank6.50%7.00%07/05/2021
Ujjivan Small Finance Bank6.25%6.75%16th August 2021
Utkarsh Small Finance Bank6.00%6.50%July 01, 2021
Capital Small Finance Bank6.00%6.50%June 03, 2021
Equitas Small Finance Bank5.75%6.25%1st October 2021
AU Small Finance Bank5.75%6.25%14th October 2021
Shivalik Small Finance Bank5.50%6.00%November 9th, 2021
Source: Bank Websites

Story first published: Monday, November 15, 2021, 16:21 [IST]
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