SBI Tax Savings Scheme: Interest Rate, Lock-In Period, Other Details

State Bank of India (SBI), country's largest lender, has urged customers to invest in tax saving schemes to lower their tax burden. "Evaluate your financial goals to invest in tax saving instruments accordingly, to save taxes," said SBI on microblogging website - Twitter. SBI's tax savings scheme 2006, a type of fixed deposit (FD) scheme, offers tax benefits of up to Rs 1.5 lakh under Section 80C of Income Tax Act, according to SBI's website- sbi.co.in. Fixed deposits or FDs are secure financial instruments which fetch guaranteed returns.

Here are key things to know about SBI Tax Savings Scheme, 2006:

Eligibility

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's website.

Minimum/Maximum Deposit

Under SBI tax savings scheme, customers are allowed 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.

Tenure

The minimum tenure for SBI Tax Savings Scheme, 2006, is five years which can go up to a maximum of 10 years, according to the lender.

Interest Rates

The interest rates for the SBI tax savings scheme are similar to that of fixed deposits. The interest rates for retail domestic fixed deposits below Rs 1 crore are 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

No deposit can be encashed before the expiry of five years from the date of its receipt under SBI tax savings scheme.