Tax saving FD

When it comes to investing, fixed deposits rank first in terms of safety. Apart from normal fixed deposits, you can open a fixed deposit to claim deduction under section 80C.

Here are the things you need to know about tax-saving fixed deposits:

They have a minimum lock-in period of 5 years.
The investment is eligible for deduction under section 80C.
The interest rate varies from one bank to another (as with normal fixed deposits).
Senior citizens can get a higher interest rate on investment.
In the case of a joint fixed deposit, the tax benefit can be claimed by the primary holder only.
A premature withdrawal facility is not available for these fixed deposits, during the lock-in period of 5-years.
The documents required for opening a tax-saving fixed deposit is the same as those for normal fixed deposits.
The interest payout can be taken on maturity, quarterly or monthly.

Tax-saving fixed deposit rates

Here are the fixed deposit rates of some banks as on 10th August 2022:

Please note: Interests on fixed deposits are subject to TDS deduction if the interest earned during a financial year exceeds ₹ 10,000. However, if the interest earned is less than ₹ 10,000 then the amount is not subjected to a tax deduction. In case the interest earned is less than ₹10,000 please submit form 15G or form 15H (for senior citizens) at your bank so that TDS is not deducted.

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