Updated on Feb 8th 2012.
I updated my tax saver fixed deposits page today, and I thought I’d create a separate page to record some of the better paying interest rates on these tax saving FDs.
With that in mind, here is a list with some of the best interest rates on fixed deposits that are covered under Section 80C that I could find.
I’m sure there are some that I have missed, so if you know of any banks that pay well, please leave a comment or drop in an email, and I will update the list.
| Bank | Interest Rate |
| City Union Bank | 9.50% |
| State Bank of Travancore | 9.50% |
| IDBI Bank | 9.50% |
| Axis Bank | 9.50% |
| State Bank of Hyderabad | 9.25% |
| South Indian Bank | 9.25% |
| SBI | 9.25% |
| J&K Bank | 9.25% |
| Central Bank of India | 9.09% |
| Kotak Bank | 9.00% |
| Karur Vysya Bank | 9.00% |
| Canara Bank | 9.00% |
| Punjab National Bank | 9.00% |
| Bank of Maharashtra | 9.00% |
| Indian Overseas Bank | 9.00% |
| ICICI Bank | 8.75% |
| Vijaya Bank | 8.75% |
| Bank of Baroda | 8.50% |
| Allahabad Bank | 8.50% |
This is just a list of the best tax saving fixed deposits, but those are not the only instruments that offer you tax saving benefits. There are other instruments and this easy to understand graphic explains them to you.
You may also like:
- Banks with High Interest Rates on Fixed Deposits
- Fixed deposits interest rates in India
- Tax Saving Fixed Deposits in India
- 6 things you should know about company fixed deposits
- ICICI Home Finance Fixed Deposits
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Hi,
I want to invest 3 lacs FD for 10 years in SBI. Should i pay any tax at maturity value? or on interest earned? If yes how much is excepted and how much will be taxed?
Thanks in advance
FD more than 5 yrs, will be exempted under tax.
some sites saying u need to pay tax for the interest earned for 10years FD …that is 30% or 10% TDS…is it correct??? can u please confirm it…
Hi
Any interest earned from a bank instrument is taxable, even a rupee earned in a saving account is taxable and FD is no exception. The interest earned will be included in your income and taxed as per your slab. For FD, the interest earned is also subject to TDS as per rules.
Only principal amount of 5 year TAX SAVER FD (Please note TAX SAVER FD and not normal FD) is qualified for deduction under 80C subject to a limit of Rs 1,00,000 including other investments, if any. Please note that even in TAX SAVER FD interest earned is taxable.
@ Dhanjayan
I hope this also clears your stand.
Thanks
HI Umesh,
thanks for the info. i meant to say the same, but was not in-detail. Anyway, thanks.
I want to invest on tax saving fixed deposits,
Is it possible to withdraw the money for any urgent reason within 5yrs. in any bank.
Hi!
I have invested some amount on a tax saver fixed deposit .Can I submit form 15g to avaoid TDS ?
Regards,
Priya
Priya you can only avoid TDS by furnishing this if you aren’t liable to pay any tax, i.e. your tax liability is nil for the year. Is that applicable to you?
hi,
I have invested in sbi tax saver FD for 5 years, is it possiblefor me to withdraw the money partial/full after one or two years or before 5 years if needed.
can any one get me a good advice.
thanks
NO. You can not.
For a good advice you better contact your bank.
Hi,
Your page reports that SBT has a interest rate of 9.5%, but when I follow the SBT link the SBT webpage mentions the interest rate on FD of 5 year period as 8.75%. Can you please help me clarify my doubt?
Warm regards,
Debjani.
Debjani – Sorry about that – it seems that I need to update this page as the source of the information is the bank’s website and the rates that you see there are the correct ones.
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