Investments in regular FDs require you to pay income tax. If the interest amount exceeds Rs 10,000, the bank would deduct tax at source (TDS) at the rate of 10 per cent per annum. But there are also tax-saving FDs, which allow you to save on income tax outgo.
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FDs provide you with the flexibility of fixing your money over a period of time. They offer various tenors with duration ranging from seven days to 10 years. But every bank has its own tenure criteria. Nevertheless, you should go for an FD in any bank, whether you hold a bank account or not. Choose what suits you the best, rather than falling into the trap of premature withdrawals, say financial experts.
Given below is a comparison of fixed deposit (FD) interest rates of State Bank of India (SBI), ICICI Bank, HDFC Bank, Axis Bank, and Punjab National Bank (the interest rates are valid only on bank fixed deposits below Rs 1 crore):
|Banks||Up to 1 year||Up to 3 years||Up to 5 years||Up to 10 years|
Some of these key banks also offer savings account options which can help you earn FD-like interest rates. Post offices also offer fixed deposits.