Tax saving FDs are among the savings options that offer tax exemption under Section 80C. An investor can claim a deduction of up to Rs 1.5 lakh by investing in tax-saving FDs.
The maturity period of tax-saver FD is 5 years. The interest earned from tax-saver FD is taxable. Premature withdrawal cannot be done in tax-saving FDs and you cannot get a loan against tax-saving FDs.
SBI offers an interest rate of 6.5% for general customers and 7% for senior citizens on its tax saving FD. The minimum deposit amount is Rs 1,000 and its multiples while the maximum deposit amount should not exceed Rs 1,50,000 in a year.
Axis Bank offers 7% interest to the general public and 7.75% interest to senior citizens on FDs maturing between five years to ten years.
ICICI Bank offers interest rates of 7% to general customers and 7.5% to senior citizens on FDs with maturity between five years and 10 years.
HDFC Bank is offering an interest rate of 7% on tax-saving FDs. Senior citizens get an additional 50 basis points on these deposits.
