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.