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  • Tax Saving FD Interest Rates 2019 is Rated as "Great!" by 173 Users

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    Tax Saving FD Interest Rates 2019

    Tax Saving Fixed Deposit is a variant of Term Deposit schemes which comes with tax benefits. The scheme has a lock-in period of 5 years.

    Top Tax Saving FD Rates Offered by Banks

    Tax Saver FD Interest Rates
    Bank General Senior citizen

    IDFC Bank

    8.25%

    8.75%

    Deutsche Bank

    8.25%

    8.25%

    Lakshmi Vilas Bank

    7.75%

    8.35%

    DCB Bank

    7.75%

    8.25%

    Ratnakar Bank Ltd.

    7.60%

    8.10%

    Axis Bank

    7.25%

    7.75%

    HDFC Bank

    7.25%

    7.75%

    ICICI Bank

    7.25%

    7.75%

    *The interest rates of Tax Saver Fixed Deposits are subject to change at the discretion of the bank. The rates mentioned here are valid as of 12 February 2019.

    The highest Tax Saver FD interest rate of 8.25% p.a. is offered by IDFC Bank and Deutsche Bank. This is followed by the rate i.e. 7.75% p.a. provided by Lakshmi Vilas Bank and DCB Bank. IDFC Bank provides the highest Tax Saving FD rate for senior citizens: 8.75% p.a.

    Key Features of Tax Saver FD

    • Tenure period: 5 years to 10 years
    • Interest rates available: 6.80% p.a. to 8.25% p.a.
    • Deposit range: Rs.100 to Rs.1.50 lakh per financial year
    • The interest income comes under Tax Deducted at Source (TDS) as per the IT Act, 1961.
    • You can seek an exemption for TDS only if the net interest income is below Rs.10,000.
    • You must submit Form 15G/15H to the lender to avail the exemption. Form 15H is applicable for senior citizens.

    Key Benefits of Tax Saver FD

    • Tax exemptions as listed out in Section 80C of the Income Tax (IT) Act, 1961.
    • Premature withdrawal is allowed after completing 5-year lock-in period.
    • Most banks offer 0.50% hike in interest rates to senior citizens.
    • Most Tax Saving FD schemes come with an option of joint account.
    • In case of a joint account, only the primary accountholder is eligible for tax benefits.
    • Eligibility Criteria for Tax Saving Term Deposit

      • Citizen of India
      • Member of Hindu Undivided Family

      Documents needed to open a Tax Saving FD account

      • Permanent Account Number (PAN) Card
      • Government-recognized ID proof:
        • Aadhaar Card
        • Driving License
        • Passport
        • Ration Card
        • Voter ID Card
        • Government-recognized address proof
        • Proof of age (for senior citizens)
        • 2 recent color passport-size photographs

      Key Highlights of Tax Saver FDs:

      • Maturity period of a tax saver FD is 5 years.
      • Get tax deduction up to Rs.1, 50,000.
      • Deduction is available to individuals, members of Hindu undivided family (HUF), senior citizens and NRIs.
      • The interest earned from tax saver fixed deposits is taxable. Tax will deducted at source.
      • Premature withdrawal is not available.
      • You cannot get loan against tax saver fixed deposits.
      • Tax saver deposits can be opened both singly and jointly. In case of a joint account, tax benefit will be availed by first holder of the deposit as per the section 80C of the Income Tax Act, 1961.

      Tax Deductible on Fixed Deposits

      As per current tax laws an individual can claim a tax deduction for investments in tax saving fixed deposits of up to Rs.1.5 lakh. The amount will be deducted from the total gross income of the individual to arrive at the taxable income. Section 80C of the Income Tax Act permits this deduction. Listed below are some criteria to be fulfilled to claim for this deduction:

      • Hindu United Families (HUF) and individuals only are eligible to invest in tax saving fixed deposit schemes.
      • The Fixed Deposit can be of the minimum amount as stipulated by the bank.
      • The tax saving fixed deposits have a 5-year lock-in period. Premature withdrawals and and loans against the Fixed Deposit is not permitted.
      • Individuals may invest in these Fixed Deposits through any private or public sector banks, except co-operative and rural banks.
      • The Post Office Time Deposit of 5 years also qualifies for deductions under Section 80C of the Income Tax Act of 1961.
      • Post Office Fixed Deposits are transferable between post offices.
      • Fixed Deposits can be held either individually or jointly. In case of a joint fixed deposit the tax benefit will be given to the first holder of the Fixed Deposit.
      • Interest earned on these Fixed Deposits is taxable under the investor’s tax bracket, therefore, Tax Deductible at Source (TDS) is applicable. The interest payable on the investment is either on a monthly basis or quarterly basis, this interest may be reinvested.
      • Tax Deductible Fixed Deposits have a nomination facility.
      • Banks offer slightly higher interest rates to senior citizens on these Fixed Deposits. This increased interest rate exists for Tax Saving Fixed Deposits.

      How to Avoid TDS on FDs

      Tax Deducted at Source (TDS) is applicable to all interest income that is earned in India, including Fixed Deposits (FDs). A TDS deduction is made as per the prevailing income tax rules. While it is a crime not to pay tax of FDs, some wise financial planning will go a long way in helping depositors paying unnecessary tax and penalties. Let us understand more about how to avoid TDS on FDs and do better tax planning when it comes to FDs. First of all, it is important to know that in every financial year if the income earned through interest exceeds Rs.10,000, the applicant or account holder will have to pay tax at any cost. However, if the interest earned is less than Rs.10,000, then the account holder will not have to pay tax.

      • Self-declaration: If the interest earned from FDs and the total taxable income earned during the financial year is not more than the prescribed taxable limit, please submit form 15G or 15H, whichever is applicable. These forms should be duly filled in, signed and then submitted to the bank to make sure TDS is not deducted from the interest income that is earned on FDs. However, please note that under any circumstances if the interest earned is eligible for tax deduction, then, even if the above forms are submitted, the tax will be deducted and the forms will be considered void. It is also possible to fill and submit these forms online without any hassle and most banks in India offer this facility. To be eligible to apply for self-declaration using these forms the total interest income earned must not exceed Rs.10,000 per annum.
      • Which form is for whom? There is always a confusion regarding form 15H and form 15G. Form 15H is for senior citizens, while the latter is for others. Form 15G can be filled by individuals or a Hindu Undivided Family. The applicant must be a resident of India who is 60 years or less and his/her income should not exceed the prescribed tax limit. Form 15H can only be filled by an Indian resident who above 60 years of age and by an individual who falls below the prescribed tax limit.
      • Managing investments better: Sometimes, when it comes to making wise financial decisions, timing is everything. In the case of FDs, if one can make investments in such a manner that it does not exceed Rs.10,000 in one year, then it will be the best option. For example, one could invest in a 1-year fixed deposit in the month of October, in such a case, the financial year will be split into two. This is because the financial year comes to an end by March 31. This is one of the options that FD investors have in order to save TDS.
      • The second applicant waived off TDS? If you are the first applicant in a joint FD, then TDS will be deducted from your account automatically if the interest income earned exceeds the limit. However, if you are the second applicant in a joint account, then TDS is not likely to be deducted. It helps to make a note of this point before opening a joint account.
      • Distributing investments: Another option that investors have is to distribute investments across various banks, instead of putting it all in one bank.
      • PAN: The interest earned on all FDs are fully taxable and if the interest income exceeds Rs.10,000, TDS will be levied at the rate of 10%. Please note that it is very important for the FD account holder to furnish his/her Permanent Account Number (PAN) details, then banks will deduct TDS at a higher rate, which is usually 20%.
      • Late submission: In case a person has forgotten to fill in and submit the self-declaration forms, there is no need to fret. In such a case, even if the TDS deduction has already been made, the Income Tax department will make a refund, if the account holder files for tax returns. This can be done every financial year without any hassle. The only disadvantage of this method is that the account holder has to wait for a long time to receive his/her refund. The account holder will have to wait until the next July and for the refund to be processed it will take another few months.

      FDs still remains one among the most preferred investment options because they offer certain guaranteed returns without any financial risk element. It is very important to take all necessary steps to do tax planning and better manage your investments instead of paying hefty taxes. Other than the methods mentioned above if one makes other investments, one can claim tax exemption, and this will help reduce the tax burden on the individual to a certain extent.

      Things To Know About Tax Saving Fixed Deposits

      As per current tax laws, if one invests in a tax saving FD, he/she can claim the invested amount up to a maximum of Rs 1.5 lakh as a deduction from his/her income. The amount invested this way is meant to cut from gross total income to arrive at taxable income. This kind of deduction is permitted under Section 80C of the Income Tax Act. Section 80C further determines the upper-limit of investment – which is currently fixed at Rs 1.5 lakh. The Tax-saving fixed deposit is one of the few gateways presently permitted for investment for one to claim a tax break according to Section 80C of the Income Tax Act.

      Only Individuals and HUFs can make investments in the tax saving fixed deposit (FD) scheme. This FD can be put together with a certain minimum amount - and this amount varies from one bank to another. Fixed deposits have a lock-in time of 5 years, and withdrawals before maturity are not permitted, as are not loans against these FD's.

      One can invest in these FD's via any of the public or private sector banks, but not cooperative and rural banks. An investment made in the Post Office Time Deposit for a period of 5 years also qualifies one for deduction under the same section 80(C) of the Income Tax Act, 1961. This Post Office Fixed deposit comes with the provision of being transferable from one Post office to another.

      FAQs on Tax Saver Fixed Deposits

      1. What is the minimum amount needed to open a Tax Saver FD account?
      2. Most banks require you to make a deposit of at least Rs.100 for this scheme.
      3. What is range of maturity available for Tax Saver Fixed Deposit?
      4. The scheme comes with a tenure range lying between 5 years and 10 years.
      5. Is the interest income free from taxation?
      6. No, the interest is taxed under TDS.
      7. Do senior citizens get a different FD rate for this scheme?
      8. Yes, most banks offer an additional FD interest rate to senior citizens.
      9. What is the maximum Tax Saving FD interest rate available?
      10. IDFC Bank and Deutsche Bank offer the highest Tax Saver FD rate i.e. 8.25% p.a

    Customer Reviews

    • Citibank Fixed Deposit
      "Its Good"
      0.5 3.0/5 "Satisfactory"
      I have converted saving maintenance into FD account for the term of one year. I can prolong period based on my convenience, the rate of interest is average for the fixed deposit. However I have online option to open and close the fixed deposit account at any time.
      Was this review helpful? 0
      , bangalore
      Reviewed on Mar 11, 2019
    • Kotak Fixed Deposit
      "Best investment Plan"
      0.5 5.0/5 "Blown Away!"
      I have taken fixed deposit account in kotak mahindra Bank . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and response.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 3
      , bangalore
      Reviewed on Feb 20, 2019
    • ICICI Bank Fixed Deposit
      "Need to increase the interest rate"
      0.5 5.0/5 "Blown Away!"
      I do have a fixed deposit account with ICICI and it was taken recently. I have chosen ICICI because my salary and saving account was maintained with them. I am getting good response from the customer service. They are giving average interest rate. I do monthly deposit of less than 50K.
      Was this review helpful? 3
      , mumbai
      Reviewed on Feb 09, 2019
    • SBI Fixed Deposit
      "Good Investment Plan"
      0.5 4.0/5 "Great!"
      I have taken fixed deposit account in STATE BANK OF INDIA . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and response.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 9
      , mumbai
      Reviewed on Dec 12, 2018
    • Punjab National Bank Fixed Deposit
      "Good Investment Plan"
      0.5 5.0/5 "Blown Away!"
      I have taken fixed deposit account in Punjab National Bank . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and resonance.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 3
      , new delhi
      Reviewed on Dec 06, 2018
    • Axis Bank Fixed Deposit
      "Hassle Free FD account"
      0.5 4.0/5 "Great!"
      I have saving account hence in an application I can track and maintain the FD account. The bank is providing the interest rate around 6 to 8% for per annum. Its convenient I can open the FD account through app and I close the FD without any hassles. The amount also gets credited immediately to my bank account.
      Was this review helpful? 4
      , bangalore
      Reviewed on Nov 23, 2018
    • SBI Fixed Deposit
      "Average Investman plan"
      0.5 2.0/5 "Expected more"
      I have taken Fixed deposit account from the state bank of India . There is no additional charges for the account. It is short term investment plan for 5 years but am not satisfied with the rate of i9nytrest which they are giving . I used to get income tax benefits . Customer service and response is not that much good .
      Was this review helpful? 6
      , bangalore
      Reviewed on Nov 10, 2018
    • IDBI Fixed Deposit
      "Good Investment Plan"
      0.5 4.0/5 "Great!"
      I have taken Fixed deposit account from IDBI bank where am getting income tax benefits from them . There is no charges for the account . Where they are giving good rate of interest i have chosen long term investment plan.Overall am satisfied with the service and response .
      Was this review helpful? 4
      , vadodara
      Reviewed on Nov 02, 2018
    • ICICI Bank Fixed Deposit
      "Good Investment Plan"
      0.5 4.5/5 "Excellent!"
      I have taken Fixed deposit account from Icici bank where am getting income tax benefits from them . There is no charges for the account . Where they are giving good rate of interest i have chosen 5 years of tenure plan for the deposit . Overall am satisfied with the service and response .
      Was this review helpful? 5
      , hyderabad
      Reviewed on Oct 26, 2018
    • ICICI Bank Fixed Deposit
      "Good Investment Plan"
      0.5 4.0/5 "Great!"
      I have taken fixed deposit account in ICICI Bank . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and response.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 3
      , hyderabad
      Reviewed on Oct 06, 2018
    • review Fixed Deposit
      "Good service"
      0.5 4.0/5 "Great!"
      The benefits are good from the RELIANCE company mutual funds , the investment has better turn over and it is called benefit to reduce the tax. I hold the mutual funds from the reliance for more than a year and I would say it is good to have the mutual fund with the RELIANCE company.
      Was this review helpful? 0
      , lucknow
      Reviewed on Jun 01, 2018
    • SBI Fixed Deposit
      "Good Service"
      0.5 4.0/5 "Great!"
      I've a savings account with SBI. I started a Fixed Deposit with them. I started the FD for tax saving purposes. They do charge some normal annual interest rates of fixed deposit also I had never experienced any difficulty with their services.
      Was this review helpful? 10
      , chennai
      Reviewed on May 21, 2018
    • review Fixed Deposit
      "Best for investment"
      0.5 4.0/5 "Great!"
      My entire family is having membership account with Nutan Nahari Sakari Bank. It is a local bank. Earlier I had invested 4 to 5L in it and later it was broken and currently I had invested around 60K to 70K. They are offering good interest. For any query I had to visit the branch. I am getting tax benefits as well.
      Was this review helpful? 2
      , new delhi
      Reviewed on Feb 02, 2018
    • Canara Bank Fixed Deposit
      "3 years old"
      0.5 3.0/5 "Satisfactory"
      This has been good Bank that I have number of relationship with. I started with a Saving Accounts with them, followed by this Fixed Deposit. The Interest rate of 6.5% is not high, but a an alright one. I also have a Credit Card with them on the basis of this account,
      Was this review helpful? 5
      , new delhi
      Reviewed on Nov 25, 2017
    • ICICI Bank Fixed Deposit
      "Great banking service"
      0.5 5.0/5 "Blown Away!"
      Totally I have 3 Fixed Deposit accounts with ICICI Bank. I am surprised where I can close my account by using online service. The interest rate was almost same like other public sector banks. No tax benefits, which are regular once here. I got a bonus points and very much happy with ICICI Service.
      Was this review helpful? 5
      , hyderabad
      Reviewed on Nov 18, 2017
    • Axis Bank Fixed Deposit
      "Good service"
      0.5 4.0/5 "Great!"
      Even though I don't like the saving account with Axis bank as there is a minimum balance of Rs. 10000 has to be maintained I like the fixed deposit account with Axis bank as that process is simple and smooth and I have it for 2.5 years and also they pay good interests rates of 7.5%.
      Was this review helpful? 5
      , faridabad
      Reviewed on Nov 17, 2017
    • SBI Fixed Deposit
      "Fixed deposit"
      0.5 4.0/5 "Great!"
      SBI Fixed Deposit is the first thing that I would look out for, we can book the FD online, I even get the FD bond online it is created automatically too . They provide the best rate in the industry . Further more , we get the options to change the maturity instructions online too. Not sure about the tax benefit. When I placed a request for liquidation, I got my funds back immediately and this FD was opened a couple of years back.
      Was this review helpful? 3
      , bangalore
      Reviewed on Nov 14, 2017
    • HDFC Bank Fixed Deposit
      "Fixed deposit"
      0.5 5.0/5 "Blown Away!"
      HDFC Fixed Deposit is good, as every one can invest in FD the interest rate at that time was 6.5% for a short tenure. I am pretty sure for the long tenure they will provide tax benefits. I had placed a request for this FD through online through my account i can view my maturity information online. I remember placing a request for change of nominee online once.
      Was this review helpful? 3
      , bangalore
      Reviewed on Nov 10, 2017
    • HDFC Bank Fixed Deposit
      "FD account"
      0.5 5.0/5 "Blown Away!"
      HDFC FD is really good, I have got a competitive interest rate also everything is prefect here. I am not getting tax benefit, but I am holding this FD for a period of 2 to 3 months. No compliments were offered. I had placed a request for the FD online and the interest rate is 6.75%.
      Was this review helpful? 1
      , bangalore
      Reviewed on Sep 29, 2017
    • IndusInd Bank Fixed Deposit
      "Fixed depost"
      0.5 5.0/5 "Blown Away!"
      With INDUDIND, I am holding a NRE so based on which they offered a NRE rate. This was opened and closed. This request was placed online no challenges nor any issues. I did not get any tax benefit for this FD. It was opened on the basis of NRE....
      Was this review helpful? 1
      , thane
      Reviewed on Sep 23, 2017
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