New Delhi: Tax optimization should always be part of your financial plan, not something you do at the end of the year. Consider your financial objectives while investing. Bank FDs are more appealing to those in lower tax bands. According to statistics provided by BankBazaar, small finance banks and smaller private banks are offering interest rates on tax-saving FDs of up to 6.75 percent amid dropping interest rates. The top five banks with the best interest rates on tax-saving deposits are shown below.
Section 80C of the Income Tax Act allows for tax deductions on investments up to Rs 1.5 lakh. Premature withdrawals are not permitted from tax-saving FDs, which have a five-year lock-in term.
Suryoday Small Finance Bank pays up to 6.75 percent interest on tax-saving deposits. Suryoday has the best interest rates among small financing institutions. In five years, a capital of Rs 1.5 lakh invested grows to Rs 2.10 lakh.
Yes Bank is giving up to 6.5 percent return on tax-saving deposits. This bank has the best interest rates among private banks. In five years, a deposit of Rs 1.5 lakh becomes Rs 2.07 lakh.
On tax-saving deposits, RBL Bank is offering interest rates as high as 6.3 percent. In five years, a deposit of Rs 1.5 lakh becomes Rs 2.05 lakh.
On tax-saving deposits, Deutsche Bank gives up to 6.25 percent. Deutsche Bank has the best interest rate among overseas banks. In five years, a deposit of Rs 1.5 lakh becomes Rs 2.05 lakh.
On tax-saving deposits, Ujjivan Small Finance Bank offers interest rates of up to 6.25 percent. In five years, a deposit of Rs 1.5 lakh becomes Rs 2.05 lakh.
To attract new deposits, smaller private banks and small finance institutions are giving higher interest rates. The Reserve Bank of India’s Deposit Insurance and Credit Guarantee Corporation (DICGC) insures fixed deposit investments up to Rs 5 lakh.
As of October 6, 2021, data was gathered from the websites of the respective banks. Only FDs belonging to international, private, small, and public sector banks that are listed on the Bombay stock exchange have been counted by BankBazaar. Banks whose data was not available on their websites were not taken into account. These are only the rates for non-senior people’ tax-saving five-year FDs.