Tax smart: Discover the latest tax-saving FD rates offered by top banks

Tax-saver rates: Major banks are currently offering competitive interest rates on tax-saving fixed deposits, with rates surpassing 7 per cent per annum. These fixed deposits typically come with a 5-year lock-in period, and the maximum deposit amount allowed is Rs 1.5 lakh.

Investors with a conservative approach often turn to fixed deposits for assured returns, shielding themselves from the unpredictable nature of the market. In addition to regular fixed deposits, investors also explore tax-saving fixed deposits as a means to earn higher interest and benefit from tax exemptions.

Notably, tax deductions under section 80C apply solely to the deposited amount, while the interest earned is subject to taxation.

In the case of joint deposits, the tax benefit under section 80C is extended only to the primary holder. Deposits can be made for amounts ranging from a minimum of Rs 100 to a maximum of Rs 1.5 lakh per financial year.

Tax saver rates

Here are the interest rates offered by major banks on tax-saving fixed deposits:

HDFC Bank: The largest private lender offers a 7.00 per cent interest rate to regular citizens, with an additional 50 basis points for senior citizens. Monthly and quarterly interest payouts are available.

ICICI Bank: The second-largest private lender provides a 7 per cent interest rate for regular citizens and 7.50 per cent for senior citizens. Depositors can choose monthly or quarterly interest payouts.

Kotak Mahindra Bank: The bank offers a 6.20 per cent interest rate per annum on a five-year tax-saving fixed deposit, the same as its regular fixed deposits.

State Bank of India (SBI): The largest state lender offers a 6.50 per cent interest rate per annum on tax-saving fixed deposits, with a minimum deposit of Rs 1,000 and a maximum of Rs 1.5 lakh. The longest deposit period is 10 years.

Punjab National Bank (PNB): The second-largest state lender provides a 6.50 per cent interest rate for regular citizens and 7 per cent for senior citizens on tax-saving fixed deposits.

Experts advise investors to carefully consider these rates and terms before opting for a tax-saving fixed deposit, aligning their choice with their financial objectives.