What is Tax Saving Fixed Deposit?

An account type known as Tax Saving Fixed Deposit (FD) account provides tax deduction under Section 80C of the Income Tax Act of 1961. By opening a tax-saving fixed deposit account, any investor is eligible to receive an annual deduction. 1.5 lakh up to Rs.
Tax benefit is available to the first holder only if you choose a joint mode of holding. Tax saver fixed deposit maturity period of 5 years. Hindu Undivided Families (HUFs) and individuals are eligible for deduction under section 80C.

Key Features of Tax Saving FD

• TDS will be utilized as per the extant rules.
• Tax-saving fixed deposits have a lock-in period of five years.
• In case of joint deposit, only the first depositor will be eligible for tax benefit under section 80C.
• During the lock-in period of five years, the loan facility is not available.
• Interest rates for tax saving TDS are applicable as per prevailing interest rate
• The interest rates on tax saving fixed deposits vary by bank, here are the banks with the highest tax saving FD interest rates.

interest taxable
According to HDFC Bank “Interest is taxable as per your tax slab. Also, the bank will deduct TDS at 10% if all your deposits and your interest income in branches exceed Rs 10,000 in a financial year. If you have not submitted your PAN Bank will deduct TDS at 20%

death of account holder
According to SBI’s website, “In case of death of the account holder, the nominee/legal heir can withdraw the deposit any time before or after maturity.
In case of death of the first account holder in the joint account, the other holder is entitled to withdraw the deposit before maturity. The bank will pay interest at the rate applicable for the period deposited without any penalty.”

post office fixed deposit
Investment under TD of 5 years is eligible for the benefit of section 80C of the Income Tax Act, 1961. The interest rate offered for this quarter is 6.7%.