87202This is how low salary people should avail credit card benefits!

Fixed deposits (FD) are, trusted by millions as one of the safest and most popular investment options since they offer fixed returns. Tax saving FDs are a type of fixed deposits which offer dual benefits of tax saving and assured returns. The interest rates vary from bank to bank. The maximum amount to be deposited in a tax saving FD is Rs 1.5 lakh in a financial year. Tax-saving FDs come with a lock-in period of five years. A person cannot withdraw the money from the FD before the lock-in period in case of any emergency.

The interest on FDs will be paid monthly, quarterly, or annually. One can prefer the compounding option, which means that any interest you receive is re-invested. The interest earned from a tax-saving FD is taxable. The interest is added to the annual income and is taxable according to the tax bracket.

The interest rates on tax-saving fixed deposits vary from bank to bank. Take a look at interest rates offers by the country’s four major public and private commercial banks — State Bank of India (SBI), Punjab National Bank (PNB), HDFC Bank and ICICI Bank.

State Bank of India (SBI), the country’s largest lender, offers tax savings schemes to its customers. The minimum deposit amount under this scheme is Rs 1,000 and in multiples of Rs 100 thereafter. The minimum period of deposit is five years and the maximum period 10 years. In general circumstances no deposit shall be encashed before the expiry of lock in a period of five years. Rate of interest as applicable to term deposits is 5.40% for the public. Senior citizens can avail 0.50% additional interest on their fixed deposit.

PNB

The country’s second largest state-owned bank Punjab National Bank (PNB) now offers 5.25% interest on tax saver fixed deposits to the general public for tenure of five years and above five years to 10 years. But senior citizens will get 6.25% interest for the same tenures.

HDFC Bank

HDFC Bank, the country’s largest private sector bank, also offers tax saving fixed deposit options. One can open this account depositing just Rs 100. The tenure and lock in periods is five years. Now HDFC Bank offers an interest rate of 5.30% per annum on tax-saving FD to the general public.

ICICI Bank

The ICICI Bank tax saver fixed deposit offers the opportunity to earn 5.35% interest. The minimum investment amount is Rs 10,000 for a duration of five years.