These banks offer best interest rates on Tax-Saving FDs

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The hunt for tax saving schemes is never-ending. Taxpayers are always looking for safe schemes offering good returns. One such option is Tax -Saving Fixed Deposits.

The duration of the scheme is for 5 years. All private and public sector banks offer this facility.

Features:

— Individuals and Hindu Undivided Family (HUF) get tax exemption on investment in tax saving FD.

— FD is done for at least 5 years.

Prior to maturity, loans on withdrawal and FD are not available in this category.

— Investments made for 5 years are tax-exempt under Section 80C of the Income Tax Act

— Post office FD can be transferred from one post to another.

— FD can be done in single or joint holding. If joint holding is there, only the first holder will get the benefit of tax exemption.

— Interest on 5 years FD is not tax free and TDS is deducted by adding it to the investor’s income.

— Interest on deposit is available on monthly / quarterly basis.

— The lock-in period of 5-year FD also stays for 5 years.

A look at interest rates offered by banks:

—  RBL – 6.75%

—  Yes Bank – 6.75%

—  Post Office – 6.70%

—  IndusInd Bank – 6.50%

—  Axis Bank – 5.50%

—  ICICI Bank – 5.50%

—  HDFC – 5.50%

—  SBI – 5.40%

—  Punjab National Bank – 5.30%

—  Bank of India – 5.30%

What is Section 80C?

Section 80C of the Income Tax Act is part of the Income Tax Act, 1961. It mentions those investments in which one can claim exemption in investment tax by investing. If you also want to take advantage of the rebate before the end of the current financial year, then you can invest in the upcoming instruments.