Income Tax News: The last part of the fiscal year 2023–2024 is underway. There are just a few days remaining in this fiscal year. There is a scramble to save taxes at the last minute as time is running out. While some invest in government schemes, others do so in insurance. Although very few people are aware of it, the Equity Linked Savings Scheme (ELSS) is one of the greatest ways to save money on investments, but there are hazards involved.
Preference for Safety in Investments
The majority of those that save taxes or invest do not wish to incur investment risk. Even with poor returns, they still want their money to remain secure. For them, the safety of their income is paramount. In such a scenario, Tax Saver Bank FD might be a wise choice if you wish to invest money safely to reduce taxes. What is a Tax Saving Bank FD, and which banks offer this service? What rate of interest do banks give on funds that save taxes? We’re going to talk about it in detail now.
Section 80-C Benefits for Tax Saver Bank FDs
Section 80-C of the Income Tax Act offers the benefit of tax exemption for Tax Saver Bank Fixed Deposits (FDs). The 5-year Tax Saver Bank FD is available. A bank savings account cannot be used to withdraw funds during the five-year lock-in period. Returns and financial security are guaranteed with this. The Reserve Bank of India’s (RBI) subsidiary Deposit Insurance and Credit Guarantee Corporation (DICGC) oversees the operation of tax-saving FDs from banks. This includes coverage for the investor’s and the bank’s Rs 5 lakh.
The fact that the interest gained on a tax-saving bank account is exempt from taxes is, however, its greatest drawback. The TDS deduction does not relieve bank FD investors of their tax obligations; this includes investors with five-year tax savings. The investor’s annual income includes the interest from the FD, after which tax is withheld based on the investor’s income tax slab. Additionally, most banks often do not let you take out a loan against a tax saver FD, but they do let you do so against standard FDs.
Tax Exemptions for Tax Saving Bank FD Investors
An investor in a Tax Saving Bank FD is eligible for tax exemptions on various savings plans, such as PPF, principal repayment on a home loan, life insurance premiums, etc. On a five-year tax-saving FD, a tax exemption of up to Rs 1.5 lakh can be claimed.
List Of Banks
Here, we go into great detail regarding the savings accounts (FD) offered by the top ten banks in the nation, as well as the interest that is paid on FD.-
HDFC Bank
On a regular FD, EdgeFC Bank is offering 7% yearly interest. In this case, older citizens receive an additional 0.5 percent interest on FD at a rate of 7.5 percent.
ICICI Bank
Similar to HDFC Bank, ICICI Bank offers interest on FDs at a rate of 7.5 percent.
State Bank Of India
The biggest government bank in the nation, SBI, offers elderly folks 7.5 percent interest on FD and 6.5 percent interest on general FD.
Kotak Mahindra Bank
Regular people can choose from fixed deposit plans offered by Kotak Mahindra Bank with terms varying from seven days to ten years. Interest rates offered by this bank range from 6.2 to 6.7 percent.
Axis Bank
The highest interest rates, 7% on regular FD and 7.75% on Senator Citizen, are being offered by Axis Bank. Here, FDs are available for five to ten years.
IndusInd Bank
IndusInd Bank offers interest on regular, or standard, fixed-rate deposits at a rate of 7.25 percent. Interest is paid at a rate of 7.75 percent annually to older persons.
Bank of Baroda
Such a programme is run by Bank of Baroda. The Bank of Baroda offers interest on fixed-rate deposits at rates between 6.5 and 7.15 percent annually.
Punjab National Bank
In comparison to private banks, Punjab National Bank offers lower FD rates. In this case, the interest rate on general FD is 6.5 percent, whereas the interest rate on FD for senior citizens is 7 percent.
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