Tax Saving Fd
The maximum amount allowed for investment in a tax saving FD account is Rs 1.5 lakh. There is a lock-in period of five years. That means it is not possible to withdraw the amount from the account before the expiry of the investment period. As per Rule 80-C of the Income Tax Act, Rs 1.5 Lakh towards Tax Saving FD can get tax deduction. Eligible for this benefit only through old tax system.
Factors to consider
- The maximum deposit in a tax saving FD account is Rs 1.5 lakh.
- Investment cannot be withdrawn for five years.
- Interest income from Tax Savings FD is not exempted from Income Tax. Only the amount invested is eligible for tax deduction up to Rs 1.5 lakh.
Banks with high interest rates
Below are the details of the five banks that offer the highest interest rates on Tax Savings Fixed Deposit Accounts. As per the notification given on the bank’s website on October 7, 2023, the following is the interest rate offered for deposits of less than two crores.
1. DCB Bank
DCB Bank, a leading private sector banking institution, is offering tax saving FDs at a rate of 7.4 per cent to general investors.
2. Indusind Bank
Tax Savings FD from Indusind Bank, a leading private banking institution, offers an interest rate of 7.25 percent.
3. Yes Bank
Yes Bank, one of the leading new generation banking institutions, is offering 7.25 per cent interest on tax saving FD to general category investors.
4. Axis Bank
Tax Savings FD from the country’s largest private banking institution, Axis Bank, is getting interest at the rate of 7 percent.
5. HDFC Bank
HDFC Bank, the country’s largest private banking institution, offers 7 percent interest on tax savings fixed deposits.