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Tax-Saving Bank Fixed Deposits (FDs) By SBI, ICICI Bank, HDFC Bank Explained

Investors can claim a maximum of Rs 1.5 lakh as tax benefit through tax-saving fixed deposits (FDs), under Section 80C of the Income Tax Act.

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Tax-Saving Bank Fixed Deposits (FDs) By SBI, ICICI Bank, HDFC Bank Explained

Premature withdrawals or loans are not allowed on tax-saving fixed deposits (FDs).

Income tax-saving bank fixed deposits (FDs) help a customer save on income tax outgo. Bank fixed deposits, which are hugely popular among investors, allow investors to save their money and earn an interest income on the same. Regular fixed deposits offer a premature withdrawal facility while tax-saving fixed deposits require a minimum lock-in period of five years. Premature withdrawals or loans are not allowed on tax-saving fixed deposits. Under Section 80C of the Income Tax Act, 1961, investors can claim a maximum of Rs 1.5 lakh as tax benefit through tax-saving fixed deposits.

(Also Read: Latest Bank FD Interest Rates Offered By SBI, HDFC Bank, ICICI Bank, Indian Overseas Bank)

Banks like State Bank of India (SBI), ICICI Bank and HDFC Bank have different interest rates for tax-saving fixed deposits. Given below are interest rates on tax-saving fixed deposits of SBI, ICICI Bank and HDFC Bank:

Tax-saving fixed deposits interest rates of State Bank of India (SBI)
SBI tax-saving scheme requires a minimum deposit Rs. 1,000 or multiples thereof. The maximum deposit should not exceed Rs. 1,50,000 in a year, SBI said on its website, sbi.co.in. The minimum tenor is five years and the maximum is 10 years. The following are the interest rates on deposits below Rs 1 crore:
 
TenorsExisting for Public w.e.f. 28.02.2018Revised For Public w.e.f. 28.03.2018Existing for Senior Citizens w.e.f. 28.02.2018Revised for Senior Citizens w.e.f. 28.03.2018
5 years and up to 10 years
6.5
6.75
7
7.25

(Also Read: State Bank Of India Fixed Deposits - Latest Interest Rates On Offer)

Tax-saving fixed deposits interest rates of ICICI Bank
ICICI Bank said that it may allow premature withdrawal of the following fixed deposits in  exceptional circumstances: in the event of any direction from any statutory and/or regulatory authority or deceased claim settlement cases. Here are the interest rates on tax-saving fixed deposits of ICICI Bank on deposits between Rs 1 crore and Rs 5 crore, according to its website, icicibank.com:
Single Deposit
Rates of Interest (% p.a.) w.e.f April 11, 2018
Tenure Period₹ 1 crore to less than ₹ 5 crore
5 years 1 day to 7 years6.6
7 years 1 day to 10 years6.6

(Also Read: Key Changes In New ITR Forms For Assessment Year 2018-19)

Comments
Tax-saving fixed deposits interest rates of HDFC Bank:
HDFC Bank revised interest rates on fixed deposits without a premature withdrawal facility with effect from April 10, 2018, said the bank on its website, hdfcbank.com. The following are the interest rates on non-withdrawable domestic term or fixed deposits for amounts equal & more than Rs 5 crore:

(Also Read: New Income Tax Return (ITR) Forms Released, Tax Slabs For FY 2017-18)
 
PeriodRs 5 crore - Rs 10 crore
3 year 1 day to 5 years6.55%
5 year 1 day to 10 years 6.05%

You can earn an interest income on income tax-saving deposits on a monthly or quarterly basis. If the investor wants, he/she can reinvest the interest amount.

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