{"id":7763,"date":"2026-04-29T20:15:00","date_gmt":"2026-04-29T14:45:00","guid":{"rendered":"https:\/\/tradebrains.in\/money\/?p=7763"},"modified":"2026-04-29T15:21:30","modified_gmt":"2026-04-29T09:51:30","slug":"capital-gains-bonds-vs-tax-saving-fds-which-gives-higher-returns-on-50k-investment-over-5-years","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/money\/capital-gains-bonds-vs-tax-saving-fds-which-gives-higher-returns-on-50k-investment-over-5-years\/","title":{"rendered":"Capital Gains Bonds vs Tax-Saving FDs: Which Gives Higher Returns on \u20b950K Investment Over 5 Years?"},"content":{"rendered":"\n
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Synopsis<\/strong>: This article talks about two of the best tax saving instruments which are Capital Gains Bond and Tax-Saving FDs. The aim of the article is to help readers understand these instruments through comparison and the various tax benefits that they can get on investing in these instruments.\u00a0<\/em><\/p>\n<\/blockquote>\n\n\n\n

India has certain methods through which the investors can earn income tax benefits along with making their investments. These methods come under the Income Tax Act, 1961. There are two major tools used for saving tax in India, which are Tax-Saving Fixed Deposits and Capital Bonds. Investors can claim a deduction of \u20b91.5 lakh under Section 80C using Tax Saving FDs, while Capital Bonds help save taxes on long-term capital gains from property sales, with an exemption up to \u20b950 lakh per year.<\/p>

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What are Tax-Saving FDs<\/strong><\/h2>\n\n\n\n

Tax-Saving Fixed Deposits are unique types of term deposits provided by banks that ensure fixed rates of return and tax exemptions under Section 80C. They help individuals save taxes while earning fixed interest, making them attractive for conservative investors seeking security and tax benefits. Key features of Tax-Saving FDs are as follows:<\/p>\n\n\n\n

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  • The Lock-in period <\/strong>of Tax-Saving FD is 5 years<\/strong> without any withdrawals or loans.<\/li>\n\n\n\n
  • Minimum deposit<\/strong> amount is from \u20b9100 to \u20b910,000\u00a0<\/li>\n\n\n\n
  • Maximum deposit<\/strong> amount is \u20b91.5 lakh for tax saving benefits under Section 80C.<\/li>\n\n\n\n
  • Interest rates<\/strong> from 6-8% p.a. in 2026,<\/li>\n\n\n\n
  • Additional interest rate of 0.50% for Senior Citizens<\/strong>.\u00a0<\/li>\n\n\n\n
  • Total interest amount is taxable as per income slab. However, tax deduction at source applies above \u20b940,000 (normal) and \u20b950,000 (senior citizens).<\/li>\n\n\n\n
  • Available in individual and joint forms; tax benefits are applicable to the first holder.<\/li>\n\n\n\n
  • Interest may be withdrawn monthly, quarterly, annually or cumulatively.<\/li>\n<\/ul>\n\n\n\n

    What are Capital Gains Bonds<\/strong><\/h2>\n\n\n\n

    Capital Bonds (54EC bonds) are backed by the government and are issued by RECL, PFC, and IRFC. Investors can save tax on their long-term capital gains from selling their property by reinvesting the gain using Section 54EC of the Income Tax Act.<\/p>