Top 7 Tax Saving Fixed Deposits in India Offering Up to 8% Returns – Compare Rates for Regular & Senior Citizens

Synopsis: This article talks about the features and benefits of the Tax Savings Fixed Deposits (FD) and the top FDs that have the highest rate of interests. 

Tax Saving FDs allow you to make an investment that can be used to save tax under the section 80C of the Income Tax Act. These FDs are designed to be locked in for 5 years as per the Act, and then they can be claimed and used to get a tax exemption. The maximum Tax exemption provided is ₹1.5 lakh. 

Features of Tax Saver FDs

• Their tenure can be anywhere from 5 years to 10 years
• The interest rates provided are usually more than 6%
• Minimum deposit required for these FDs is ₹100. Many banks allow deposit more than ₹1.5 lakh, but that is the maximum tax benefit you can claim under Section 80C.

Benefits of Tax Saver FD

• It provides the investor with tax exemption
• Premature withdrawal is allowed after 5 years
• Many banks increase their interest rates for senior citizens
• Most Tax Saver FDs come with the option of making it a joint account. 

Note: Only the primary holder will be eligible for the tax benefit in a joint account.

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Eligibility

• The account holder should be a Resident Indian
• It can only be opened by Individuals or a Hindu Undivided Family (HUF) with an option to open a joint account as well
• They must possess a PAN card

Documents Required 

• PAN Card
• Government-recognized ID proof such as Aadhar Card, Driving License, Passport, Ration Card, Voter ID card, etc.
• Government-recognised address proof
• Proof of age (For senior citizens)
• 2 passport-size photos. 

Top Tax-Saver FDS Interest Rate

Conclusion

FDs have been and continue to be the investment option to be picked as it is safe, and it guarantees a return. You need to plan your taxes properly and manage your investments in a way that ensures you don’t have to pay a huge amount in tax. Using tax-savings FDs, you will be able to not only earn returns that range from 6.25 to 8%, but you will also get the opportunity to use them to claim tax benefits and claim deductions on taxes of up to 1.5 lakhs as per Section 80C of the Income Tax Act.

Written by Sagar V M