Tax-saving FDs: These private, PSU banks offer best interest rate on schemes

A fixed deposit or FD scheme helps you in several ways– you can invest to create a decent corpus to meet short to mid-term financial goals and also get tax benefits.

If you are a conservative depositor, you can consider investing in fixed deposits, as the schemes are considered one of the safest savings avenues among the other market-linked tax-saving avenues.

Usually, FD schemes come with several tenure options. For instance, you can invest in FDs for 1 to 10 years, depending on your chosen scheme. FDs also come up with a period of less than one year. Thus, you can select the tenure of the FD based on your convenience. You must also know that not all fixed deposits help you provide tax-benefit. Banks that offer five-year FDs can help you save on tax.

By investing in such fixed deposits, you can claim an income tax deduction under Section 80C of the income tax act. The maximum investment you can make in a tax-saving fixed deposit is 1.5 lakh per financial year. While investing in such FDs, you should check the scheme’s features, benefits, terms and conditions. Typically, you do not get loans or premature withdrawal facilities on tax-saving FDs.

You must know that the tax benefit is available only to the first holder of the FD account. So if you have a joint holder, the latter cannot claim tax benefits.

Look at some of the best 5- year banks’ tax savings and fixed deposit interest rates.

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Data as on respective banks’ website on 21 Sep 2022; Compiled by

You can buy such tax-saving FDs by visiting the banks’ website or closeby bank branch. After investing in such tax-saving FD, you claim a tax deduction benefit in that particular financial year.

Disclaimer: The interest rate of all listed (BSE) Public & Pvt Banks considered for data compilation (Except Foreign banks and Small Finance Banks); Banks for which data is not available on their website are not considered. The table includes only Tax Saving FDs (for non-senior citizens) for a 5-Year tenure. Top 5 Public and Pvt. Banks are listed in their respective categories in descending order, i.e., the bank offering the highest interest is placed at the top and the lowest at the bottom.

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