Tax Savings: Investments kept in these FDs for 5 years are included in the exemption under section 80C of the Income Tax Act.
Tax Savings: Fixed Deposit is one such option where investment is considered to be the safest. Along with this, there is also a guarantee of returns which is almost around the retail inflation rate.
Tax saving FD
If you want to save tax, then this FD will prove to be of great use. The returns are fixed and the safety of the investment is also there. The interest rate for this is different in every bank. Many banks are giving an interest of up to 7.75 percent to senior citizens on fixed deposits with tax savings of 5 years.
What are the features?
Tax saving Fixed Deposits have a lock-in of 5 years or more. In case of an emergency, an investor can withdraw money from the FD even before lock-in.
Customers cannot take loans against these deposits, which are available on normal FDs. At the same time, the interest on these FDs can be earned every month, every quarter, on an annual basis or in a lump sum.
Investments held in these FDs for 5 years are included in the exemption under section 80C of the Income Tax Act. Interest earned from tax saving fixed deposits is taxable. This earning is added to your annual income and taxed as per your tax bracket.
Rate of interest
The interest rate on tax saving fixed deposits varies from bank to bank. In recent times, banks have made changes in the interest rates of FDs. Or know how much profit banks are giving to senior citizens:
Suryoday Small Finance Bank is offering 7.75 per cent interest rate to senior citizens on 5-year tax saving fixed deposits.
At the same time, Utkarsh Small Finance Bank and Ujjivan, both small finance banks are offering 7.25 percent interest rate to senior citizens.
RBL Bank is offering an interest rate of 7.10 per cent on tax saving deposits to senior citizens. AU Small Finance Bank and Jana Small Finance Bank are giving 7 percent return on this.
small finance bank
Small Finance Banks are special category of banks which have been created to provide banking facilities to the lowest strata of the society. These come under the regulatory purview like normal commercial banks and are under the supervision of the Reserve Bank of India.
There are about 10 such small finance banks in India, out of which 4 are also listed in the stock market.
These banks have been created in the last 6 years.