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.