Tax Saving FD or Fixed Deposits is a safe means of receiving tax deduction under Section 80C of the 1961 Income Tax Act. Through investing in them, you can claim a deduction of up to Rs. 1.5 lakh that have a lock-in period of 5 years. But it is essential to consider that partial or premature withdrawals are not allowed in tax-saving fixed deposits. In case of your death you can also nominate / authorise anyone, as an investor, to withdraw your deposit before or after maturity. Most of the banks like DCB Bank, IDBI Bank, SBI, HDFC Bank and Axis Bank offer high interest on tax saving fixed-deposit schemes to the tax savers. So let's take a look at the higher interest rates that certain banks are providing on tax-saving fixed deposits:
1. DCB Bank Tax Saver FD
DCB Bank provides high interest rates of 6.95 percent for regular citizens on tax saving FDs, and 7.45 percent for senior citizens. The minimum amount of investment is capped under Rs. 10,000 up to Rs. 1.5 lakh per annum. Loan against FD is not allowed in this scheme.
2. IDFC First Bank Tax Saver FD
The IDFC First Bank Tax Saving FD provides a 6.75 per cent interest rate for regular citizens and 7.25 per cent interest rate for senior citizens. To open the Tax Saver FD account an individual must deposit a minimum of Rs. 10,000.
3. YES Bank Tax Saving FD
YES Bank is currently fetching an interest rate of 6.75% for regular citizens and 7.25% for senior citizens. The interest is paid on a monthly basis or on a quarterly basis on the deposit. The deposit can be made into two types of accounts, namely: Type Deposits single holder and Type Deposits Joint holder. If you opt for a joint holding type, then the first holder will obtain the tax advantage. The fixed deposit tax saver's maturity period is 5 years. The Hindu Undivided Family (HUF) and individuals will also get a deduction under section 80C.
4. IndusInd Bank Tax Saving FD
The IndusInd Tax Saving FD lets depositors save taxes and earn an interest rate of 6.75% for regular citizens on this plan, and 7.25% for senior citizens. Under the Tax Saver FD scheme depositors can invest up to a maximum threshold of Rs. 1.5 lakh.
5. RBL Bank Tax Saver FD
RBL Bank proposes a fixed-deposit tax-saving scheme for a lock-in period of 5 years with a minimum and maximum investment cap of Rs 100 to Rs 1.5 lakh (in multiples of Rs 100). The interest rate is currently ranging from 6.50% for general citizens and 7.00% for senior citizens. No premature withdrawal or partial withdrawal is allowed in this scheme.
6. Federal Bank Tax Saving FD
This bank allows you to make a minimum investment of Rs. 100 up to a threshold of Rs. 1.5 lakh for a lock-in period of 5 years. A general citizen can get an interest rate of 5.50% and senior citizens can get an interest of 6.00% on tax saving FD.
7. Axis Bank Tax Saving FD
You can invest in Axis Bank's tax-saving fixed deposit with a lock-in term of 5 years on a monthly / quarterly payout basis or with a reinvestment option. The bank gives current depositors with an interest of 5.50 percent per annum and senior citizens with an interest of 6.00 per cent for a minimum investment in multiples of Rs. 100 up to a maximum of Rs. 1.5 lakh.
8. SBI Tax Saving FD
State Bank of India provides fixed deposits to tax savers with a 5 year lock-in term. The general depositors and senior citizens can get 6.20% interest on tax saver fixed deposits (5 years) for a minimum deposit of Rs. 1,000 up to a maximum of Rs. 1.5 lakh per annum. Also the investors are allowed to claim benefits under Section 80C of the Income Tax Act, 1961.
9. IDBI Bank Tax Saver FD
IDBI Bank provides a fixed deposit scheme called Suvidha Tax Saving in which an individual can invest up to Rs . 1.5 lakh for 5 years and earn a lump sum at the time of maturity. The bank is currently providing 5.30% interest per annum for regular citizens and 5.90% interest per annum for senior citizens.
10. HDFC Bank Tax Saver FD
HDFC Bank also provides a lock-in period of 5 years on its tax saving FD. An investor can invest from a minimum of Rs 100 to Rs 1.5 lakh which will achieve an interest rate of 5.30% for regular citizens and 5.80% for senior citizens. Premature withdrawal is not allowed as this FD has a lock-in period of 5 years.