5 Banks Offering Higher Interest Rates on Tax Saving FDs

Updated: Thursday, January 29, 2015, 9:33 [IST]

Bank tax Savings Fixed Deposits are one of the safest investment avenues to consider for savings under 80C of the IT Act.

One can save tax by investing in Bank Tax Savings Fixed Deposits, where the only problem is the 5-year lock-in, as compared to three years in ULIPs or ELSS.

If you are among those set of investors who have ample liquidity and wish to invest in instruments that saves tax for you.

Here is a look at some such tax saving deposit scheme of different public and private sector banking institutions that currently are offering highest returns.

Lakshmi Vilas Bank

To both regular and senior citizens, the bank offers an interest rate of 8.75% per annum.

IDBI Bank

IDBI Bank Tax-Saving Fixed Deposit which gives the dual benefits of tax exemption u/s 80c of the Income Tax Act and higher returns on your investments with interest rates at 8.75% p.a. for regular deposits and 9.25 % p.a. for Senior Citizens

City Union Bank

For both general and senior citizen, the bank offer a rate of interest p.a. Of 8.50%. In case of joint holding, the tax break shall be available only to the first or primary holder in the deposit scheme.

Bank of Baroda

Baroda Tax savings term deposit on its tax saving deposits is offering an interest rate @ 8.75 p.a. The interest rate remains the same for still higher tenure over 5 years.