Tax Saving FD (Fixed Deposits) is 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.
Tax Saving FD: Advantages
Following reasons make Tax Saving fixed deposit attractive to investors;
- Convenient to invest. ICICI Bank, SBI, HDFC Bank, etc offers online facility for Tax Saving FD
- Redemption on maturity comes directly to your bank account
- High Safety – FD up to Rs 5 Lakh is insured
Tax Saving FD: Disadvantages
- There are lot of competing products like EPF, PPF, ELSS to exaust the investment of Rs 1.5 Lakh u/s 80C
- The interest earned is taxable
- Cannot be withdrawn prematurely
- Cannot be pledged to secure loan or as security
Tax Saving FD Interest Rate
As of July 5, 2020 banks are offering 4.00% – 7.35% for general public and 4.50% – 7.85% for Senior Citizens.
- The…
