New Delhi, first published 14 Jun 2022 at 9:57am IST
Fixed rate term deposits allow you to invest while saving money on taxes under Section 80C of the Income Tax Act. It is one of the most popular tax saving choices. Tax-saving fixed deposits allow deductions of up to Rs 1.5 lakh per annum, but only for a single account. A five-year lock-up period applies to tax-saving FDs.
Investors should be aware that interest earned on tax savings deposits is taxable depending on the tax bracket of the taxpayer. TDS will be deducted when interest earned or reinvested on tax-saving FDs reaches Rs 40,000 for regular customers and Rs 50,000 for seniors during a financial year.
As bank interest rates rise following the central bank’s increase in the repo rate to 4.90% in two tranches, investing in tax-saving term deposits could be a good option for those who want to deposit for five years without making premature withdrawals. while seeking to save tax. Consider the three private banks that offer seniors up to 7.10% return on tax-saving term deposits.
Yes Bank Tax Saving Fixed Deposit requires a minimum deposit of Rs 1,000 and a maximum deposit limit of Rs 1,50,000 per fiscal year. This tax-saving deposit program has a 5-year lock-up period and a nominating option. Yes Bank offers tax-efficient fixed deposit accounts that can be opened through internet banking, telephone banking, or a local branch. Effective June 6, 2022, Yes Bank is offering a 7% yield on discounted fixed rate deposits to senior residents, while regular customers receive a 6.25% yield. These interest rates can be paid monthly or quarterly, and the account balance can be reinvested at maturity.
A minimum deposit of Rs 1,000 and a maximum investment of Rs 1,50,000 is allowed in DCB Bank’s Tax Saving Fixed Deposit Option. Early withdrawal is not permitted from a DCB Bank Tax Saver FD if the deposit is made for five years or more. Effective May 21, 2022, DCB Bank will offer seniors a 7.10% interest rate on tax-saving term deposits, while regular customers will receive an interest rate of 6.60% . DCB Bank does not allow automatic renewal of tax-saving term deposits and no loans can be taken out on the account.
RBL Bank Tax Savings Fixed Deposit Accounts can be opened in multiples of Rs 100 to Rs 1,50,000. Its tax-advantaged FD also has a lock-up period of 5 years and a nomination option. The RBL Bank Tax Savings Deposit Program, as the name suggests, does not allow partial or premature withdrawal. In the case of joint filings, tax benefits under 80C are only available to the primary holder. RBL Bank currently offers a 6.80% return on its FD Tax Savings Program to senior customers and a 6.30% return to regular customers. These interest rates will come into effect on June 8, 2022.
Note: Interest rates are obtained from official bank websites.
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Last updated Jun 14, 2022 9:57am IST