Tax Saving FD: Tax Saving FD is liked more by those people who want to save their tax. While tax-saving FDs are an attractive option, post office term deposits are another investment vehicle that attracts investors.
Tax Saving FD : Tax Saving FD is liked more by those people who want to save their tax. While tax-saving FDs are an attractive option, post office term deposits are another investment vehicle that attracts investors. The government updates the interest rates for Small Saving Scheme every quarter.
However, rates on all 10 small savings schemes, including the 5-year Post Office Time Deposit (POTD), remain the same as last time for the April-June 2024 quarter. The government has not made any changes in this. Now if we talk about their 5-year FG deposits, only then banks give tax benefits.
Here is a comparison of tax saving FD and post office 5 year time deposit of major banks.
Tax Saving FD
Tax saving FD is like FD but tax benefit is available on FD of 5 years. In this you can save tax under Section 80C of the Income Tax Act 1961. In this you can save tax only up to a maximum of Rs 1.50 lakh. There is a lock-in period of 5 years. Banks are giving interest ranging from 5.5% to 7.75% on this. You cannot withdraw money before the lock-in period. The bank is offering different interest rates on tax-saving fixed deposits. State Bank of India (SBI) is offering interest rate of 6.50% to all citizens. HDFC Bank and ICICI Bank are offering 7% interest rate for tax-saving FD. DCB Bank offers 7.75% interest on tax-saving FDs, while IndusInd Bank offers 7.25%.
Post Office FD Scheme (POTD)
Investing in 5-year Post Office Time Deposit (POTD) offers tax benefits under Section 80C of the Income Tax Act 1961. These deposits can be made for one, two, three or even five years. In this, money can be withdrawn before maturity but only after six months from the day of deposit. The interest rate on POTD for the April-June 2024 quarter is 7.5%. The minimum amount to be invested is Rs 1,000 and you can invest in multiples of Rs 100.
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