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Tax Saving FD

If you are in the market for safer investment products, a fixed deposit is a perfect choice. After all, an FD is literally free of market-specific dangers and offers decent interest rates for individuals with a lower risk appetite. Besides, if you are into a risk-free investment, there are several FD selections to look for, including normal FDs, senior citizen FDs with improved rates, non-cumulative FDs, Flexi FDs and, certainly the Tax-Saving FD.

 

Regardless of the choices you make, a tax saver FD is probably the best financial resource to consider, if you want to maximize returns by keeping tax liabilities to a minimum. However, this type of fixed deposit doesn’t only help you save taxes via ITR but offers other benefits concerning flexibility, better financial management, and higher earning potential.

What is a Tax Saver FD?

A tax saver Fixed deposit is the one that allows you to get hefty tax deductions as per Section 80C of the ITA. In simpler terms, you can claim a maximum accrued sum of up to ₹ 1.5 Lakhs in your ITR statement with the Tax Saver FD in play. However, unlike other fixed deposit schemes, the tax-saving ones are subject to deliberation as they come with a specific, 5 year locking period.

 

In addition to the minimum tenure of 5 years, the FD interest rates offered are between 5.5 and 7.5 percent. Lastly, the calculated interest is taxable but you can always work around the same.

What is the Minimum Amount for Tax Saver FD?

The best thing about a tax saver FD is that you can start with an amount as small as Rs. 100 as the tax saver FD minimum amount. However, for those who are looking at the maximum limit to enhance the tax-saving benefits, you can add up to ₹ 1.5 Lakhs, each year, in the concerned corpus. Also, the maximum amount is the one that you can use for claiming tax benefits on the ITR for the given fixed deposit.

Benefits of Tax Saver FD

  • A tax saver FD allows you to keep the amount locked in for 5 years ensuring continued tax benefits

  • Investment-specific plan that instils better financial habits and guarantees steady wealth creation

  • Higher interest rates as compared to other fixed deposit rates in India

  • No recurring payments are needed

  • Flexible fixed deposit

  • No option for premature withdrawal, which ensures mandatory saving compared to most other financial tools

Table: Pertinent Details about Tax-Saver FDs

Investment

Tenure

Returns

Tax Obligations

Tax-Saver FD

Minimum 5 years

5.5 percent to 7.5 percent

Yes

FAQs

  • ✔️Who can invest in an FD scheme?

    Any individual looking for a tax saving scheme with decent yearly interest rates can consider investing in a fixed deposit scheme.

  • ✔️How can I invest in these FDs?

    You simply need to head over to the Finserv MARKETS, compare the interest rates, take a look at the tenors, zero in on the deposit mode, and start investing.

  • ✔️Is Tax Saving FD safe?

    Yes, tax-saving FDs are completely safe as they ensure that the amount gets locked in for a minimum of 5 years.

  • ✔️What is the new tax regime?

    As per the new rule, an unclaimed and matured FD account will attract an interest rate comparable to any savings account or the initial contracted FD rate, depending on which one is lower.

  • ✔️How can I Invest in this FD?

    You can select different financial institutions at Finserv MARKETS, check the obligations, and start investing in a tax-saving FD.

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