The SBI Tax Saving Fixed Deposit Scheme offers deposits the opportunity to earn an attractive rate of interest on lump-sum amounts up to Rs.1.5 lakh while also availing tax deductions of up to Rs.1.5 lakh (including other exemptions in this category as per the Income Tax Act, 1961). Senior citizens can avail 0.50% additional interest on their fixed deposit. There is a 5-year lock-in period for this due to the tax benefits.
State Bank of India (SBI) offers the Tax Saving Fixed Deposit Scheme, 2006, with which you can get tax exemptions on your investments. The scheme comes with a lock-in period of 5 years. Let's know a bit more about this plan.
General depositors can get 5.40% p.a. as interest whereas senior citizens can get 6.20% p.a. You can deposit a minimum of Rs.1,000 and a maximum of Rs.1.5 lakh with this scheme. The lock-in period is 5 years before which you cannot withdraw funds from your FD account. Note that the interest rates are subject to change as per the discretion of the bank.
*Interest rates are subject to change at the discretion of the bank
Summary of SBI Tax Saving Scheme FD features:
|Account type||Term deposit/Special term deposit|
Maximum: Rs.1.5 lakh
Minimum: 5 years
Maximum: 10 years
|Premature withdrawals||Not Available|
*Interest rates with effect from 10 September 2020.
Other Tax Saving Scheme
It's recommended to calculate your SBI FD interest rate before hand so that you know how much returns you will receive in the future. In order to do that, you can use any online fixed deposit calculator. The easy-to-use online tool lets you calculate the maturity amount in no time. All you need to do is enter the relevant details, including the deposit term, investment amount, and the rate of interest.
|Eligibility to Open a FD||
|Benefits of a SBI tax saving FD||
Residents of India or any undivided Hindu families with a Permanent Account Number (PAN) are eligible for this facility.
The minimum tenure is 5 years within which you won't be able to withdraw funds from your account. However, after 5 years you may choose to close your account pre-maturely. But this has to be done from the home branch. Note that the maximum deposit period is 10 years.
No, only the first holder is eligible for tax exemption under Section 80C.
No, you won't be able to do that. The maturity amount can only be transferred to the account from where the FD investment took place.
You can use savings, current, or overdraft account to open your deposit account. However, make sure that the account is an active one.
No, you have to collect your account receipt from the home branch.
You can deposit a minimum of Rs.1,000 (and in multiples of Rs.100 thereafter) and a maximum of Rs.1.5 lakh in a year.
*All amounts, tenures, repayment requirements, interest rates, charges, fees, ceilings, requirements, criteria, exclusions, terms and conditions are as of 12 May 2020.
Useful Information on SBI Fixed Deposit
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