Experts believe that investment planning for tax saving should be done in the beginning, not in the last months of the financial year. If you do not want to take any risk, then small banks are offering good interest rates on Tax Saving Fixed Deposits. Let us know about interest rates.
Most of the people defer the investment to the last minute, usually till January-March every year for tax saving purposes. Experts suggest that it is good to start it at the beginning of the new financial year. Risk-averse investors and those in lower tax brackets can consider tax saving fixed deposits (FDs). Recently some banks have increased the interest rates on fixed deposits. With the rise in inflation, these banks have increased their rates. Data from BankBazaar shows that small private banks in particular offer interest rates up to 6.75 per cent on tax saving fixed deposits.
Tax deduction can be claimed under Section 80C of the Income Tax Act on investments up to Rs 1.5 lakh, but do not invest only for tax saving. Tax saving fixed deposits should suit your financial plan. Tax saving fixed deposits have a lock-in period of 5 years and premature withdrawal is not allowed.
AU Small Finance Bank and Suryoday Small Finance Bank offer interest up to 6.75 per cent on tax saving deposits. Both these banks offer the best interest rates among all the smaller banks. An investment of Rs 1.5 lakh increases to Rs 2.10 lakh in 5 years.
IndusInd Bank offers an interest rate of up to 6.5 per cent on Tax Saving Deposits. It offers the best interest rates among private sector banks. An investment of Rs 1.5 lakh increases to Rs 2.07 lakh in 5 years.
Ujjivan Small Finance Bank offers an interest rate of up to 6.4 per cent on Tax Saving Deposits. In this, your investment of Rs 1.5 lakh increases to Rs 2.06 lakh in 5 years.
RBL Bank is offering interest rates up to 6.3 per cent on Tax Saving Deposits. This means that the amount of Rs 1.5 lakh increases to Rs 2.05 lakh in 5 years.
Germany’s multinational investment bank Deutsche Bank along with DCB Bank, IDFC First Bank and Yes Bank offer 6.25 per cent interest rate on tax saving deposits.
Equitas Small Finance Bank is offering an interest rate of up to 6 per cent on Tax Saving Deposits. The amount of Rs 1.5 lakh increases to Rs 2.02 lakh in 5 years.
These small private banks are offering higher interest rates for raising fresh deposits. Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of Reserve Bank of India, gives guarantee in fixed deposit investments up to Rs 5 lakh.
These data are from the websites of banks till 6 April 2022. BankBazaar has only accounted for Fixed Deposits relating to foreign, private, small finance and public sector banks which are listed on BSE. Banks whose data is not available on their websites are not considered. These rates are for 5-year tax saving FDs for non-senior citizens.
