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Top Banks Pay Up To 7.75% Interest To Senior Citizens On Tax-Saving FDs. Compare Returns Here

Investment in these fixed deposits - also know as income tax-saving FDs - is locked in for a period of five years from the date of issue.

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Top Banks Pay Up To 7.75% Interest To Senior Citizens On Tax-Saving FDs. Compare Returns Here

Bank FD rate: The maximum benefit that can be claimed through a five-year deposit is Rs 1.5 lakh a year


Major lenders today offer income tax benefits under a special type of fixed deposit (FD). Also known as tax-saving fixed deposit or tax-saving FD, this term deposit allows a minimum maturity period of five years and a maximum of 10 years. Using this FD, the investor can claim a deduction up to Rs 1.5 lakh a year from taxable income under Section 80C of the Income Tax Act. Top banks - from state-run State Bank of India (SBI) and Punjab National Bank (PNB), to private sector peers HDFC Bank and ICICI Bank - pay interest rates to the tune of 6.7-7.75 per cent to senior citizens on tax-saving fixed deposits up to Rs 1 crore, according to their websites.

Here's a comparison of interest rates offered by top banks on income tax-saving FD up to Rs 1 crore:

BankInterest rate
 General publicSenior citizen
State Bank of India6.85%7.35%
Punjab National Bank6.25%6.75%
Bank of Baroda6.70%6.70%
Canara Bank6.20%6.70%
HDFC Bank7.25%7.75%
ICICI Bank7.25%7.75%
(Source: Bank websites)

State Bank of India (SBI)

The country's largest bank pays interest at the rate of 6.85 per cent to the general public, and 7.35 per cent to senior citizens, on five-year fixed deposits under its tax savings scheme, SBI Tax Savings Scheme, according to its corporate website - sbi.co.in. 

Punjab National Bank (PNB)

Under the five-teat tax-saving fixed deposit, PNB pays an interest rate of 6.25 per cent to the general public and 6.75 per cent to senior citizens, according to the bank's website - pnbindia.in. 

Bank of Baroda

Bank of Baroda pays interest at the rate of 6.7 per cent on investment in the tax-saving fixed deposit to both general and senior citizens, according to the lender's website - bankofbaroda.com.

Canara Bank

Canara Bank pays an interest rate of 6.2 per cent to the general public, and 6.7 per cent to senior citizens on tax-saving fixed deposits, according to the lender's portal - canarabank.com.

ICICI Bank

ICICI Bank offers interest at the rate of 7.25 per cent to the general public, and 7.75 per cent to senior citizens on deposits in five-year tax-saving fixed deposits, according to the lender's website - icicibank.com.

HDFC Bank

HDFC Bank pays interest at the rate of 7.25 per cent to the general public and 7.75 per cent to senior citizens, on five-year tax-saving fixed deposit, according to its website - hdfcbank.com.

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Banks do not allow a premature withdrawal from such FD accounts before completion of five years from the date of issue. In other words, investment in these fixed deposits - tax-saving FDs - is locked in for a period of five years from the date of issue, which means that in order to utilize the tax benefit, the investor has to keep the amount locked in the fixed deposit during this period .



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