Top 5 Bank FDs for Saving Tax: High Interest Rates offered by which Bank? Check Here
Top 5 Bank FDs for Saving Tax: High Interest Rates offered by which Bank? Check Here
Like the traditional FDs, tax-saving FDs also allow an investment deduction of up to Rs. 1.5 lakh for investment under Section 80C of the Income-tax Act, 1961. The amount that can be invested in a tax-saving FD in a financial year is a maximum of Rs. 1.5 lakh. It is mandatory that the deposit not be withdrawn for the first five years. Anyone thinking of opening a tax savings FD has to know that it has a lock-in period of 5 years and that one cannot withdraw the money before the maturity period elapses.
As for your investments, remember that your money will be tied up in this fund for five years. Note that, the interest earned on tax-saving FDs is eligible for TDS as per the investor’s tax slab rate. TDS is applicable to individuals if the total interest earned in a financial year is more than Rs. 40,000. However, senior citizens are allowed to claim interest income of up to Rs. 50,000 under Section 80TTB annually.
Here are the five Best Tax-Saving Bank Fixed Deposits
Unlike the selection of FDs for other purposes, selecting a tax-saving FD, should not be chosen blindly from the existing bank in which one has the savings account and instead, the interest rates offered by various banks should be compared. A higher interest rate means higher returns in the future.
| TENURE: 5 YEARS AND ABOVE | INTEREST RATE | WHAT Rs 10,000 WILL GROW TO |
| YES BANK | 7.25 | 14,323 |
| City Union Bank | 7.1 | 14,217 |
| DCB Bank | 7.4 | 14,428 |
| Dhanlaxmi Bank | 7.25 | 14,323 |
| Induslnd Bank | 7.25 | 14,323 |
According to economists, the interest rate on fixed deposits has perhaps reached its highest level in this cycle. The moment, the RBI announces a new repo rate that is lower than the previous one, banks will have no choice but to adjust the interest rates on fixed deposits.
With rates currently up and given the fact that we are plateauing on rate increases, now is a good time to lock in higher yields, which will be available going forward only after the reversal cycle is activated.