Income Tax Saving Fixed Deposits: 10 Things To Know
1) Income tax-saving fixed deposits have a minimum lock-in period of five years. No premature withdrawals or loans are allowed.
2) SBI, for example, offers tax-saving deposits for a minimum tenure of five years and a maximum of 10 years, according to the bank's website.
3) Interest rates on tax-saving fixed deposits offered by SBI, ICICI Bank and and HDFC Bank, as shared them on their websites.
|Banks||Interest Rate For General Public||For Senior Citizens|
4) The maximum investment allowed by banks in income tax saver fixed deposits is Rs 1.5 lakh.
5) Some banks allow the minimum amount from Rs 100. The minimum amount required to open an income tax saver FD in SBI is Rs 1,000, according to the bank's website.
6) Interest earned in income-tax saving FDs is taxable according to the individual's tax bracket.
(Read: How To Save Income Tax? PPF Vs ELSS Mutual Funds Vs Tax Saver Bank FDs)
7) TDS or tax deducted at source is applicable on the interest earned. TDS is applicable when interest payable or reinvested on fixed deposits across all branches, per customer, exceed Rs 10,000 in a financial year.
8) Investors can choose monthly/quarterly option for earning interest. The interest amount earned can also be reinvested, if the investor wants so.
9) In case of joint deposit, the tax benefit under Section 80C will be available only to the first holder of the deposit.
10) Nomination facilities are available in case of income tax-saving fixed deposits.