France Finance

Sep 6 2017

Highest Tax Saving Bank Fixed Deposit Rates 80C – July 2017 #idfc #tax #saving #fixed


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Highest Tax Saving Bank Fixed Deposit Rates U/S 80C July 2017

Highest Tax Saving Bank Fixed Deposit Rates – 80C – July 2017

Tax Saving Fixed Deposits one of the most popular way to save taxes u/s 80C of income tax. These are like normal Fixed Deposit with banks but is labeled as “Tax Saving FD” while making the deposit.

Why you Should Invest?

  1. Convenient to invest. ICICI Bank, SBI, HDFC Bank, etc offers online facility for Tax Saving FD
  2. Redemption on maturity comes directly to your bank account
  3. High Safety FD up to Rs 1 Lakh is insured

Why you Should Not Invest?

  1. There are lot of competing products like EPF, PPF, ELSS to exaust the investment of Rs 1.5 Lakh u/s 80C
  2. The interest earned is taxable
  3. Cannot be withdrawn prematurely
  4. Cannot be pledged to secure loan or as security

Tax Saving Fixed Deposit Interest Rate

Bandhan Bank and Bank of India have reduced their interest rates (compared to last month) on tax Saving FDs.

Also State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore have merged with State Bank of India effective April 1, 2017.

As of July 4, 2017 banks are offering 6.00% 7.50% for general public and 7.00% 8.00% for Senior Citizens.

  1. The best Tax Saving Fixed Deposit Interest offered is 7.50% for General Public byThe Ratnakar Bank
  2. The best Senior citizens Tax Saving Fixed Deposit Interest offered is 8.00% by The Ratnakar Bank

The table below lists the banks in alphabetical order with their respective interest rate offer on Tax Saving FDs for General and Senior Citizens.

The highest Interest Rates have been highlighted :

Taxation TDS Tax Saving Fixed Deposits:

The interest received on tax Saving Fixed Deposit is fully taxable. The interest income is considered as income from other sources for Tax filing and taxed at marginal tax rates applicable.

TDS would be deducted at the rate of 10% of the interest paid, if the interest paid exceeds Rs 10,000 in a financial year. You can see the same in Form 26AS .

In case your income does not exceed taxable slab and so want to avoid TDS, you can submit Form 15G or 15H when making the deposit. You would also need to submit the form at the start of every financial year to the concerned bank branch.

Key Points – Tax Saving FD:

Below are some of points to keep in mind while investing in Tax Saving Deposits:

  1. As the Tax Saving FD scheme was introduced in Budget of 2006, it s also known as Tax Saving Deposit scheme 2006 (Notification Number 203/2006 and SO1220 (E) dated 28/07/2006)
  2. Most of the banks accept deposit of 5 Years only. However there are banks with deposit tenures of more than 5 Years
  3. You can deposit on either Single or Joint name. However benefit of tax deduction is available for first holder only.
  4. Most banks offer interest rate which is similar to their 5 years term deposits. Only a few banks give slightly higher interest rate for their Tax Saving Fixed Deposits
  5. Most banks give Senior citizens and their staff members additional interest of 0.25% to 0.5%
  6. Depositor can opt for either cumulative or non-cumulative way of crediting periodical interest
  7. Don’t be mislead by banks advertisements about their yield on Tax Saving FDs. Those are manipulative calculations
  8. Be cautious of small co-operative banks as they have higher risk than bigger private and public sector banks
  9. Depositor gets benefit U/s.80C of the Income Tax Act. 1961
  10. Minimum deposit is Rs.100 and in multiples thereof
  11. Maximum deposit in a Financial Year Rs.1,50,000/- [i.e. 1st April to 31st March of the following calendar year]
  12. Deposits cannot be withdrawn prematurely
  13. Deposits cannot be pledged to secure loan or as security

Disclaimer:We have tried to keep interest rates up to date, but as these change frequently you are advised to check with the bank before investing. Also it would be great if you can point out any errors through comments or email!

Direct link for Interest Rates on FDs of Banks:

Below is the direct link for Interest Rates of Major Banks. You might want to check the interest rates before doing your FD.


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