Tax saving FDs: THESE banks are offering better deals

New Delhi: There are few options on the market for investors looking for a tax-saving strategy that simultaneously provides a guaranteed return. One of them is a tax-saving fixed deposit (FD).

Tax-saving FDs enable investors to invest in order to save tax under Section 80C of the Income-Tax Act.

Under this tax-saving programme, the minimum tenure or lock-in period for deposits is 5 years. A maximum tax exemption of Rs.1.5 lakh is available.

Unlike other market-linked securities, the tax-saving fixed deposit provides guaranteed returns with minimal risk. This is one of the reasons why taxpayers like this option so much.

The interest rate on such FDs varies from bank to bank. Most banks typically provide either cumulative or non-cumulative tax-saving FDs.

Check the list of banks: 

Indusind Bank - 6.5%

RBL Bank - 6.3%

IDFC First Bank - 6.25%

DCB Bank - 5.95%

Karur Vysya Bank - 5.9%

Individuals and Hindu Undivided Families (HUFs) are the only entities that can invest in tax-saving FDs under existing income tax legislation. One can start a tax-saving FD account with a bank with which they already have a savings account or with another bank, as long as the bank enables them to do so without first creating a savings account.