Updated on Jan 2nd 2013.
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.orted List
| Bank | Interest Rate |
|---|---|
| City Union Bank | 9.50% |
| State Bank of Travancore | 9.00% |
| IDBI Bank | 9.00% |
| Indian Overseas Bank | 9.00% |
| Vijaya Bank | 9.00% |
| Bank of Baroda | 9.00% |
| State Bank of Hyderabad | 8.75% |
| South Indian Bank | 8.75% |
| SBI | 8.75% |
| Karur Vysya Bank | 8.75% |
| Bank of Maharashtra | 8.75% |
| J&K Bank | 8.50% |
| Central Bank of India | 8.50% |
| Kotak Bank | 8.50% |
| Canara Bank | 8.50% |
| Punjab National Bank | 8.50% |
| ICICI Bank | 8.50% |
| Allahabad Bank | 8.50% |
| Axis Bank | 8.25% |
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.
Tax saving deposit in bank .No mention of number of days or years to invest in this scheme
against interest rates. Which may be clarified .So that investor can plan to avail tax saving deposit in Banks.
R H Somani.
Tax Saver FD is a 5 year deposit. You must mention at your bank for TAX SAVER FD and not 5 year FD as 5 year FD is not a tax saver instrument only 5 years TAX SAVER FD is.
Normally banks give less interest in comparison to regular 5 year FD. The interest is taxable like regular FDs
There are certain limitations with this FD like you can not avail a loan etc, you can not fully/partially withdraw any amount, during these 5 years
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.
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!
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?
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
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.
if even in TAX SAVER FD interest earned is taxable.
than what is the advantage over normal FD.
Hi Nisarg
It seems you have not read the above paragraphs, that why you are asking this question.
Don’t you find any difference in investing TAX SAVER FD and NORMAL FD.
Read it again, and if you did not get your answer, ask again. I will answer.
Why so harsh Umesh? 🙂
Because the principal gets reduced from your taxable income and that reduces your tax liability.
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…
which bank offer high rate for tax saving fds
whther tamilnad mercantile bank tax saving fd rate is high or any other bank
hi,
i want to invest 1cr in fd. should i invest in one bank or few more banks to redeuce the tax and for some other IT problems?
‘Today you deposit Rs 10,000 in a 5 year fixed deposit with the State Bank of India. You shall earn compond interest rate of 6 per annum on your deposit. How much amount will you receive after 5 years?
Rs 10000 plus Rs 3469 Interest. See the Calculator in http://allbankingsolutions.com/fdcal.htm
Hi ,,
AXIS Bank website shows 80C Tax Saver FD rate as 8.25% only.
Hi all,
LVB Lakshmi vilas bank offers good tax saver fixed depostit.
For more information check the below link.
http://www.lvbank.com/ltsd.aspx
LVB is allowing is allowing 9.75 % on Tax Saver Deposit for Sr Citizens whereas IDBI Bank is allowing 10 %
Kotak bank is not paying 9.25 % on tax saver fixed deposits.
I have opened a FD on 3rd, Feb, 2012, they are paying only 9.00 %.
Pl let me know whether interest accrued on Tax saver bank FDs are deemed as reinvested in subsequent years
in bank tax saver FD or no
No. Such provision is available for NSC only
None of the banks are benefitting Indian customers with hi interest rates that they pay to NRE deposits…. Most of them pay 10-10.5% to NREs but not for resident indians. Dont understand this at all… I heard some of NRIs are taking loans in their country and placing NRE deposits to earn better returns and pay back the loan as well
I contacted LVB lakshmi vilas bank and found they are encouraging FDs > 10 lakhs at 10.5% interest rate
check out this link –
http://www.ratekhoj.com/fixed-deposits/tax-savings-fixed-deposits/tssresults.php?citizentype=non-senior&sorttype=rate&sortorder=DESC
hi, karnataka bank offers 9.5% as KBL tax planner
hi,
I want to invest 70k to save tax. Which one is better NSC or PPF or fixed deposit. What is the duration of each one and which is a better option please let me know as i am doing it for the first time.
For persons having more than 15 years of left over service, I opine PPF is suitable. For comparative features of various tax savings schemes, you may search with aid of google.
some more rates updates…
Tamilnad Mercantile Bank – 10.00 – Indian Private Sector Bank.
IDBI Bank – 9.50 – Public Sector Bank.
State Bank Of Travancore – 9.50 – Public Sector Bank.