INSUBCONTINENT EXCLUSIVE:
Five-year tax-saving fixed deposit (FD): The invested money is locked in for a period of five yearsMajor lenders offer income tax benefits
under a special type of fixed deposit (FD)
This fixed deposit - also known as tax-saving fixed deposit or tax-saving FD - allows a minimum maturity period of five years and a maximum
The investor can claim deduction of taxable income under Section 80C of the Income Tax Act under this category of bank fixed deposit
Banks do not allow a premature withdrawal from such an FD account before completion of five years from the date of issue
In other words, in order to take the income tax benefit, the investor is required to commit to a lock-in period of five years.Top banks,
from state-run State Bank of India (SBI) and Punjab National Bank (PNB) to private sector peers HDFC Bank and ICICI Bank, provide interest
rates (or return on investment) to the tune of 6.25-7.75 per cent per annum on income tax-saving five-year fixed deposits up to Rs 1
Bank7.25%7.75%(Source: SBI, Punjab National Bank, HDFC Bank and ICICI Bank websites)State Bank of India (SBI)SBI pays interest at the rate
of 6.85-7.35 per cent on fixed deposits of a minimum term of 5 years and maximum 10 years under its tax savings scheme, SBI Tax Savings
Scheme, according to the bank's website - sbi.co.in
While the interest rate of 6.85 per cent is applicable to the general public, the interest rate of 7.35 is for senior citizens
The minimum amount allowed on an SBI tax-savings fixed deposit account is Rs 1,000 and in multiples of Rs 1,000, and a maximum of Rs 1.5
lakh a year, according to its website.Punjab National Bank (PNB)To the general public, PNB pays an interest rate of 6.25 per cent on
five-year tax-saving fixed deposits up to Rs 1 crore
Investment in tax-saving FDs at Punjab National Bank fetches interest at the rate of 6.75 per cent to senior citizens, according to the
lender's website - pnbindia.in
The investor can deposit a minimum of Rs 100 and in multiples thereof, up to Rs
1.5 lakh per financial year in this account.ICICI BankICICI Bank offers interest at the rate of 7.25 per cent to the general public, and
7.75 per cent to senior citizens on deposits in five-year tax-saving fixed deposits, according to its website - icicibank.com.HDFC BankHDFC
deposit up to Rs 1 crore, according to the lender's website - hdfcbank.com
The depositor can invest a minimum of Rs 100 and amounts in the multiple of Rs 100 up to Rs 1.5 lakh in a financial year.Investment in these
fixed deposits - tax-saving FDs - is locked in for a period of five years from the date of issue, which means the investor cannot withdraw
money during this period in order to utilize the tax benefit.
