Tax-saving FD FAQs
Who should invest in tax-saving FD?
Anyone looking for a shorter lock-in period and seeking a guaranteed return tax-saving option should invest in these fixed deposits.
How can I open a tax-saving FD?
Investing in a tax-saving fixed deposit is very easy. You can open an account online or at a bank branch. Different banks offer different interest rates on tax-saving FDs, so it is best to compare rates before you make an investment.
Is tax-saving FD risky?
Tax saving fixed deposits are riskfree. The amount you invest in it is completely protected and the returns are also guaranteed.
What is the tax-saving FD interest rate?
Tax-saving fixed deposits have a fixed interest rate that remains the same throughout the 5 year tenure. The interest rates for Indian citizens, HUFs and NRIs vary from bank to bank and begin from around 8 per cent. Senior citizens and bank staff members are offered higher interest rates. The interest is taxable, deducted at source, and added to your income.
What is the tax-saving FD investment limit?
The minimum investment that can be made in a tax-saving fixed deposit is Rs 100 while the maximum is Rs 1.5 lakh in a year.
What are the tax benefits of these FDs?
The amount invested in a tax-saving fixed deposit is eligible for tax exemption under Section 80C. This amount can be a maximum of Rs 1.5 lakh a year. In case of joint holders, the tax benefit is available to only the first holder.
What is the tenure of a tax-saving FD?
Tax-saving fixed deposits have a lock-in period of 5 years. No premature withdrawals, loans or overdraft facilities are available against tax-saving FDs.
Who can invest in tax-saving FD?
Indian citizens, senior citizens, HUFs and NRIs can invest in tax-saving fixed deposits.
What happens upon maturity of tax-saving FD?
When the fixed deposit term ends, the money comes back to your bank account.
Anything else I should know?
Tax-saving fixed deposits offer a nomination facility. A tax-saving FD can be transferred from one bank branch to another.