• HDFC Bank 5 Year Tax Saving Fixed Deposit Scheme

    Investing in a fixed deposit is probably the safest form of investment compared to other investment vehicles, including stocks and bonds, to name a few. There are certain FD schemes that let you enjoy tax benefits on the investment amount and the HDFC 5-Year Tax Saving Fixed Deposit is one such scheme.

    With this plan you can enjoy FD tax exemptions under Section 80C of the Indian Income Tax Act, 1961. However, the plan comes with a lock-in period within which you cannot withdraw funds from the account. The interest rate is similar to that of any other regular HDFC fixed deposit schemes.

    Eligibility criteria

    • Residents of India
    • Hindu families that are undivided

    Features of HDFC Bank 5-Year Tax Saving Fixed Deposit

    Amount Rs.100 (and multiples of Rs.100) to Rs.1.5 lakh
    Rate of interest

    5.35% p.a. (for general citizens)

    5.85% p.a. (for senior citizens)

    Period 5 years
    • 10% will be deducted as TDS (Tax Deducted at Source) if you are projected to earn more than Rs.10,000 (Rs.50,000 for senior citizens) as interest in a financial year

    • 20% will be deducted as TDS if you fail to submit your Permanent Account Number (PAN)

    HDFC Bank 5-Year Tax Saving Fixed Deposit interest rates

    The interest rate is in sync with any other HDFC FD scheme. General citizens will enjoy an interest rate of 5.35% p.a. while the senior citizens are entitled to get an interest rate of 5.85% p.a.

    Documents required

    • Voters Identity Card
    • Pension Payment Order
    • Secondary School Leaving Certificate (10th standard)
    • Passport
    • LIC policy
    • Defense ID Card/Govt ID Card (it should include your photo, signature, and date of birth)
    • Senior citizen cards issued by Indian Airlines or Indian Railways
    • PSU Issued ID cards
    • PAN card

    HDFC Bank 5 Year Tax Saving Fixed Deposit Scheme FAQs

    1. How is my interest calculated and what's the frequency?

      The interest will be calculated on a monthly or quarterly basis. For reinvestments, the interest is calculated on a quarterly basis. Also, the principal amount is raised (for reinvestments) so as to include the interest you have earned in the previous quarter. TDS is deducted based on the income tax regulations.

    2. How can I get exemptions on TDS?

      You must intimate the bank in case your total interest earned in a financial year doesn't fall under the tax bracket. You can do so by submitting a form to the bank. However, remember the following points:

      • The TDS deducted in the previous year is non-refundable. However, you can use the TDS certificate containing all the deduction details while filing your tax return.
      • If your total interest earned doesn't fall under the tax bracket, you need to present the 15G/15H forms.
      • The 15H/15AA forms are valid for the year they have been issued.
      • For existing deposits, you need to submit Form 15G/H within the first week of the financial year.
    3. Can I open a joint account?

      Yes, you can open a joint account. However, the first holder will be subject to tax exemptions.

    4. What parameters will affect the tax I can save through this scheme?<

      It entirely depends on the tax bracket you fall under and the amount you have invested in the scheme. The more you invest in this FD plan, the more you will be able to save on tax.

    5. From where can I get the TDS certificate?

      The bank will issue a TDS certificate in Form 16A.

    6. How can I apply for the 5-Year Tax Saving Fixed Deposit scheme?

      You can visit any HDFC branch and fill in the booking account opening form to open the account.

    7. When is TDS deducted?

      TDS is deducted every time the bank pays interest or reinvests interest in a given financial year. Additionally, TDS is also deducted on the accumulated interest that's yet to be paid right at the end of a financial year.

    8. Is it possible to open a joint FD account with a non-senior citizen?

      Yes, you can open a joint FD account with a non-senior citizen.

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