Andhra Bank FD Tax Saver
Andhra Bank, now known as Union Bank, offers a special fixed deposit scheme called the Union Tax Saver FD. These scheme offers investors the chance to obtain attractive returns on their fixed deposit while also enjoying tax benefits under Section 80C of the Income Tax Act.
There are different interest payout options ranging from monthly, quarterly and half-yearly to maturity. Loan facility can be availed after completion of the five-year lock-in period.
Features of AB Tax Saver Scheme
The features of the Andhra Bank Tax Saver FD or Union Tax Saver scheme are as given below:
- The scheme offers flexibility for customers to invest in Tax Saver Fixed Deposits through monthly instalments (standing instructions), lump sum deposits, or whenever surplus funds are available.
- Accounts are maintained in a continuous deposit format, allowing deposits starting from a minimum of Rs. 1,000 and in multiples of Rs. 1,000 up to a maximum of Rs. 1,50,000 in a financial year.
- Deposits are locked in for a period of five years, with the prevailing interest rate for a five-year term deposit applicable at the time of each deposit.
- System-generated annual statements are provided by branches for claiming income tax exemption under Section 80C.
- Depositors can claim an exemption under Section 80C for the amount deposited under this scheme during the financial year.
Features of AB Tax Saver Scheme Details
Features | Details |
Minimum Period | Each deposit created under this scheme will have a tenure of five years |
Maximum Period | Not Applicable |
Lock-in Period | Five years |
Minimum Deposit Amount | Rs. 1,000 and in multiples of Rs. 1,000 thereafter |
Maximum Deposit Amount | Rs. 1,50,000 in a financial year |
Rate of Interest (ROI) | Interest is as per the prevailing rate for a five-year term deposit at the time of creating the deposit |
Interest Payment Frequency | Interest is paid on maturity along with the principal amount |
Tax Deducted at Source (TDS) | Tax Deducted at Source (TDS) will be deducted as per guidelines |
Loan Facility | Loans are not permitted, and deposits cannot be used as collateral for any other facility |
Nomination Facility | Available as per guidelines |
Automatic Renewal | Not allowed |
Premature Closure | It is allowed only in the event of the primary account holder's death |
Receipts or Passbook | Passbooks are issued to customers instead of receipts |
Eligibility Criteria for Andhra Bank Tax Saver FD
The following entities meet the eligibility criteria for the Andhra Bank Tax Saver FD:
- Individuals and Hindu Undivided Families (HUFs) with a PAN card are eligible to invest in this product.
- Single-holder deposits can be issued to individuals or the Karta of the Hindu undivided family. Joint holder deposits can be issued jointly to two adults or an adult and a minor, with payment options available to either the holder or the survivor. However, the deduction under Section 80C of the Income Tax Act is available only to the first holder of the deposit.
Andhra Bank Tax Saver FD Interest Rates
The interest rates for the Andhra Bank Tax Saver FD or Union Tax Saver effective from 14 September 2022 is 6.20% p.a. for up to 5 years and 5.80% p.a. for up to 10 years. The interest is credited on a quarterly basis and is calculated on a daily product basis. The months that interest is credited are April, July, October, and January.
FAQs on Andhra Bank FD Tax Saver
- What are the investment options available under the scheme?
The scheme offers flexibility to invest in Tax Saver Fixed Deposits through monthly instalments (Standing Instruction or SIP), lump sum deposits, or whenever surplus funds are available.
- What is the minimum and maximum deposit amount allowed for the Easy Tax Saver Deposit Scheme?
The minimum deposit amount for the Easy Tax Saver Deposit Scheme is Rs. 1,000, and subsequent deposits can be made in multiples of Rs. 1,000. The maximum deposit allowed by them in a financial year is Rs. 1,50,000.
- What is the lock-in period for deposits made under this scheme?
All deposits made in the account are locked in for a period of five years.
- Is there any penalty on premature closure of Andhra Bank Tax Saver FD or Union Tax Saver?
No, there is no penalty on premature closure of the FD but there is a lock-in period of five years during which premature closure is not allowed.
- Who is eligible to invest in the Easy Tax Saver Deposit Scheme?
All individuals and Hindu Undivided Families (HUFs) with a PAN are eligible to invest in this scheme.
- How is the interest paid on the deposits, and what about tax implications?
Interest is paid on maturity along with the principal amount. Tax Deducted at Source (TDS) will be deducted as per guidelines, and investors can claim an exemption under Section 80C for the amount deposited during the financial year.
- Is TDS applicable on Tax Saver FD?
Yes, Tax Deducted at Source (TDS) is applicable on Tax Saver FDs.
- Is there automatic renewal facility on the Andhra Bank Tax Saver FD or Union Tax Saver?
No, there is no automatic renewal facility available on the Andhra Bank Tax Saver FD or Union Tax Saver.
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