Business News Desk, Are you also planning to invest in tax saving FD? Well, there are many options to invest in tax saving FD like Public Provident Fund (PPF), National Pension System (NPS), Sukanya Samriddhi Yojana (SSY), SIP in Equity-Linked Savings Scheme (ELSS), Employees Provident Fund (EPF), Tax-Saving Fixed Deposit (FD) or life insurance premium etc. If you want to invest in FD to save tax, then you have to invest in five-year FD.
What are tax-saving fixed deposits (FDs)?
For those who want to avoid risk in investment or who fall in a lower tax bracket, tax-saving fixed deposits (FDs) can be a good option. Keep in mind that your money gets locked in these FDs for five years. That is, it cannot be withdrawn for five years.
Interest Rates on Tax-Saving FDs in Banks
Interest rates on tax-saving FDs are determined based on the term deposit holdings of banks. This interest is compounded on a quarterly basis. According to Bankbazaar, as per data till June 26, 2024, the interest rates of banks are as follows.
Axis Bank, HDFC Bank and ICICI Bank: An investment of Rs 1.5 lakh at 7% interest rate will grow to Rs 2.12 lakh in five years.
Canara Bank: An investment of Rs 1.5 lakh at 6.70% interest rate will grow to Rs 2.09 lakh in five years.
Bank of Baroda, Punjab National Bank, State Bank of India and Union Bank of India: An investment of Rs 1.5 lakh at 6.5% interest rate will grow to Rs 2.07 lakh in five years.
Indian Bank: An investment of Rs 1.5 lakh at 6.25% interest rate will grow to Rs 2.05 lakh in five years.
Bank of India: An investment of Rs 1.5 lakh at 6% interest rate will grow to Rs 2.02 lakh in five years.
DICGC Security Guarantee
The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the Reserve Bank of India, guarantees fixed deposit investments up to Rs 5 lakh. Tax-saving FDs can be a safe and stable option for investors who want fixed returns without risk. If you are planning to invest for a long period, then this is the best option.
