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Bank FDs: 5 Banks Offering The Highest Return On Tax-Saving FDs

Fixed Deposit schemes have been the most preferred form of investment for Indian investors. In comparison to equities and other investment tools, FDs offer a stable and guaranteed rate of return. and with tax-saving FD schemes, investors also have the option to save up some extra cash. Tax saving FD options are eligible for tax benefits under Section 80C of the Income-tax Act, 1961. With investment in tax-saving FDs, you can claim a tax deduction of up to Rs 1.5 lakh per financial year. These FDs have a minimum lock-in period of 5 years and the interest earned on then is taxed as per the investor’s tax bracket. In case, the investment is made jointly, only the first holder listed on the FD receipt shall be eligible for tax benefits.

Investors have the option to choose between cumulative and non-cumulative interest options on tax-saving FDs. As per the provision of the income tax laws in India, only individuals and Hindu Undivided Families (HUFs) can invest in tax-saving FDs. Investors can open tax-saving FDs with any bank after meeting their eligibility criteria (if any). Here we list some of the banks offering the highest return rate on such FDs

IndusInd Bank

The IndusInd Bank offers an interest rate of 6.5 per cent on taxing investments for 5 years. However, senior citizens get an additional 0.5 per cent return on the scheme.

RBL Bank

For FDs of 2 to 3 years, RBL bank offers its highest 6.5 per cent rate of return but on tax saving schemes, the interest is marginally lower at 6.3 per cent. Senior citizens get 6.8 return on their investment in RBL bank’s tax-saving FDs

IDFC

The return rate on tax saver deposits of IDFC First bank for deposits under Rs 2 crore is 6.25 per cent. Senior citizens are eligible for an additional 0.5 per cent rate of return.

DCB Bank

DCB Bank offers a 5.95 per cent interest rate on its tax-saving FD scheme. Investors can choose to either quarterly compound payout the interest earned on the investment

Karun Vaisya Bank

The tax shield FD scheme of Karun Vaisya Bank offers a return rate of 5.9 per cent on all deposits under Rs 2 crore.

So, if you have extra cash lying with you, you choose to invest in any of these tax-saving FDs.

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