This FD from HDFC bank is an investment-cum-tax-saving tool that promises excellent returns over its tenure. Deductions are available under Section 80C of the Income Tax Act, 1961, for amounts up to Rs.1,50,000 for investments in tax saver fixed deposit schemes.
There is a 5-year lock-in on this FD. Every quarter, interest and re-investment interest is calculated and the Principal amount is increased with the interest earned in the previous quarter.
TDS is deducted as and when applicable under the prevalent Taxation Regulations.
In order to be eligible for this scheme, one must either be:
You will also have to submit an additional document in case the account is being opened for a Senior Citizen – a proof of age that confirms that the account holder is in fact a Senior Citizen.
|Account Type||Joint / Single.|
Minimum: Rs.100, and in multiples of Rs.100 thereafter.
Maximum: Rs.1,50,000 in a financial year.
|Rate of Interest||
For investments <Rs.1 crore:
Interest rate p.a.: 7.65%.
Interest rate p.a. for senior citizens: 8.15%.
|Period||5 year lock in.|
TDS will be deducted when the interest re-invested or payable per customer is over Rs.10,000 in a financial year.
At the end of every quarter, the bank will send a TDS certificate containing all the details related to TDS deductions.
TDS rate is 10% for resident individuals and HUFs.
|Category||Non-senior citizens||Senior citizens|
|Interest rate||7.65% p.a.||8.15% p.a.|
In order to open this account for a senior citizen, you will need to furnish any of the following documents:
Basically any legally recognisable document that verifies the applicant’s age as a senior citizen.
All interest earned and total proceeds and benefits of the plan do not need to be physically collected from the bank, as they will be automatically and directly credited to the customer’s account.
Once the aggregate interest on your deposit grows larger than Rs.10,000 in a financial year, you will be subject to Tax Deduction at Source (TDS).
A form must be submitted to your HDFC Bank branch which intimates them that the interest income for the year has not exceeded Rs.10,000. It is worthwhile to note that:
*All amounts, tenures, repayment requirements, interest rates, charges, fees, ceilings, requirements, criteria, exclusions, terms and conditions are as of December, 2015. HDFC reserves the right to modify, replace, or add to or subtract from any of the above, in any way, at any time, and at its own discretion.
Useful Information on HDFC Fixed Deposit