SBI or State Bank of India offers a number of schemes under its personal banking portfolio. One such scheme offered by the country's largest bank is SBI Tax Savings Scheme, 2006, which is kind of fixed deposit or term deposit. Resident Indians as an individual or in the capacity of the Karta of the Hindu Undivided Family, are eligible to avail the benefits of this scheme, according to sbi.co.in, SBI's official website. Investors also need to have income taxPermanent Account Number (PAN) to avail this scheme.
Here are key things you need to know about SBI's Tax Savings Scheme, 2006:
Amount: One needs to deposit a minimum of Rs. 1,000 or in multiples thereof whereas the maximum deposit should not exceed Rs. 1,50,000 in a year, according to bank's portal.
Tenure: The minimum tenure for SBI Tax Savings Scheme, 2006, is five years which can go up to a maximum of 10 years, said the lender.
Rate of Interest: The rate of interest for the tax savings scheme, is similar to that on term deposits. The interest rates for retail domestic term deposits below Rs. 2 crore is 6.85 per cent for general public and 7.35 per cent for senior citizens in maturity period of 5 years and up to 10 years.
Premature withdrawal: Customers cannot withdraw the term deposit before the expiry of five years from the date of its receipt, noted SBI.
Other facilities: SBI's scheme offers tax benefits of up to Rs. 1.5 lakh under Section 80C of Income Tax Act. A nomination facility is also available with SBI's Tax Savings Scheme. However, customers cannot use the term deposit account to secure loan or as security to any other asset.