These Banks Offer Best Interest Rate On 5-Year ‘Tax-Saving’ Fixed Deposit (FD)

Fixed Deposit (FD), over the years, has spawned as one of the best ways to save money. And only if one of your new year’s resolutions was saving money, then you might not want to ignore it.

FD comes in all shapes and sizes. While some are only, month-long, other on the other hand, can extend to 10 years. Also, FDs are also used for the purpose of tax savings.

interest rate on fixed deposits
Source – Tomorrowmakers

Many people prefer to invest in tax-saving fixed deposits because of convenience and guaranteed returns. Interestingly, one can save up to Rs 1,50,000 in a financial year in tax-saving FDs.

Also Read: Read & Feel Proud: What Newspaper Headlines Read After India’s Historic Win At Gabba

However, you must be made aware that tax-saving FDs are different from normal FDs in various ways.
  • Tax-saving fixed deposits come with a lock period. You can only withdraw the money after five years.
  • Only resident individuals and Hindu Undivided Families (HUF) can open these deposits.
  • You can open tax-saving FDs in both single or in joint names. When opening a joint account, only the first holder can claim the tax benefit.
  • One can choose either monthly/quarterly/annual interest payout option
  • Interest earned on tax-saving fixed deposits is taxable.
  • Also, banks will deduct 10% TDS on the annual interest earned on these FDs. If you are exempt from paying tax, you need to submit form 15G/H at the beginning of the financial year with the bank.
  • Tax-saving FDs can’t be opened through co-operative banks and rural banks. 
  • You can also not take a loan against tax-saving fixed deposits. 
Source – CNBC

Also Read: India Will Deliver Made-in-India Covid-19 Vaccine To These 15 Countries

The banks that offer the best interest rate on 5-year tax-saving deposits to non-senior citizens are:
  • AU Small Finance Bank– 6.5%
  • RBL Bank– 6.40%
  • DCB Bank– 6.75%
  • Indusind Bank– 6.50%
  • Equitas Small Finance Bank– 6.75%
  • Yes Bank– 6.75%

Also Read: This Restaurant Will Gift You A Royal Enfield Bike If You Can Finish Its ‘Bullet Thali’ In 60 Minutes

Related Articles

Back to top button

AdBlocker Detected

Please Disable Adblock To Proceed & Used This Website!