Tax-saving fixed deposit with the bank is one of the low-risk investment instruments in the section 80C of the Income Tax Act, 1961. Investment in these FDs generates assured returns with utmost safety. In this post, I have listed the Best Tax Saving FD Rates offered by banks.
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Tax Saving Fixed Deposit (FD)
Tax-saving FD is a type of deposit scheme where you can invest to save tax u/s 80C of the Income Tax Act. It gives you the dual benefits of tax exemption u/s 80c and higher returns on your investments.
Tax saver fixed deposits come with a lock-in of five years. You can invest up to a maximum of Rs.1.5 lakh in a financial year. However, the minimum deposit amount varies from bank to bank.
Best Tax Saving FD Rates
You get assured returns when you invest in these FDs. The returns on these FDs are calculated at a fixed rate of interest. This rate of interest is known as tax saver term deposit interest rates.
The rate of interest remains the same throughout the term of the deposit. Therefore, investing in these types of FD schemes can help you get guaranteed returns.
Note that you cannot withdraw your investment before the completion of 5 years. There is also no auto-renewal facility in these types of FD schemes.
Let’s discuss which bank offers the best tax saver fixed deposit scheme.
Best Tax Saving Fixed Deposit in India
The interest rate offered on these FDs are not the same across different banks. So, you should check the interest rate across all banks before investing in these types of FD schemes.
Therefore, if you’re looking to invest in these types of FDs, below are the best tax saver FD rates offered by the bank in India.
5 Tax Saver FD Highest Interest Rate
For General Citizens
Given below are the best interest rates for general citizens.
| Name of the Bank | Interest Rates for General Citizens (in % p.a.) |
| DCB Bank | 6.95 |
| IndusInd Bank | 6.75 |
| Yes Bank | 6.5 |
| RBL Bank | 6.5 |
| AU Small Finance Bank | 6.5 |
Note: These are the Best Tax Saving FD Interest Rates as of 16 November 2020. The interest rates mentioned above are subject to change at the discretion of the bank.
For Senior Citizens
Given below are the best interest rates for senior citizens.
| Name of the Bank | Interest Rates for Senior Citizens (in % p.a.) |
| DCB Bank | 7.45 |
| IndusInd Bank | 7.25 |
| Yes Bank | 7 |
| RBL Bank | 7 |
| AU Small Finance Bank | 7 |
Note: These are the tax saver FD highest interest rate as of 16 November 2020. The interest rates mentioned in the above table are subject to change at the discretion of the bank.
Eligibility Criteria
To open an account for such type of FD at any bank, you must be
- Resident Indians
- Individuals
- Hindu Undivided Families (HUF)
- You can open these fixed deposit in a single or joint account.
Minimum and Maximum Investment Needed
The minimum investment amount varies from bank to bank. But you can invest up to a maximum of Rs.1.5 lakh in a financial year.
Tenure
Such schemes comes with a fixed lock-in tenure of 5-years. You cannot withdraw your investment before the completion of 5 years from the date of deposit. There is also no auto-renewal facility in these schemes.
Final Thoughts
I hope now you know the best tax saving FD rates in the bank in India. These best tax saver FD interest rates will help you to figure out which bank is best for these FDs.
These FD schemes give you the dual benefits of tax exemption u/s 80c and higher returns on your investments. Moreover, senior citizens enjoy higher interest rates on these fixed deposits.
Also Read: Top 6 Best Safe Investment Options in India
Also Read: Best Fixed Deposit Interest Rates: These banks are offering the highest FD rates