Tax saving fixed deposits are the most popular option for debt investors who want to reduce their tax liability. A major fixed income product for investors is the tax-saving fixed deposit (FD), which allows an annual deduction of up to 1.5 lakh under section 80C. However, tax-saving fixed deposits require a lock-in time of 5 years, and as the name suggests, premature withdrawal is not allowed. For older adults, tax-saving fixed deposits are ideal as they reduce their tax burden as well as provide a stable source of income in the form of interest rates well into their golden years.
Senior citizens are generally tax-exempt on interest payments received on deposits up to 50,000 under section 80 TTB. If the interest payment exceeds 50,000 exemption limit in a financial year which is subject to TDS, a senior citizen can reduce the TDS deduction by filing Form 15H. Elderly individuals may consider investing in tax-saving fixed deposits in the face of rising interest rates, and since retail inflation in India was at 6.71% in July, which is currently at a five-month low, they can now return to their Can get it. Fixed deposits that outperform inflation while availing DICGC coverage. From the private sector space, here are 3 banks offering inflation-beating returns of 7.50% on tax-saving fixed deposits to senior citizens.
Bandhan Bank
On August 22, 2022, private sector lender Bandhan Bank adjusted its interest rates for the last time. After the amendment, the bank is now offering a fixed interest rate of 7.50% on tax-saving fixed deposits to elderly residents. NRIs are not eligible for senior citizen rates, which are exclusively available to residents of India. Senior citizen rates are available for those who submit proof of age to the bank.
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Yes Bank
The interest rates for Yes Bank fixed deposits are effective from August 10, 2022. After the revision, the bank is now offering an interest rate of 7.50% on 5-year tax-saving fixed deposits to elderly residents. Only domestic deposits are subject to senior citizen rates, and an FD must be opened with at least INR. 10,000/-. Senior citizens have the option to get paid quarterly or reinvest their tax-saving fixed deposits, and can also benefit from higher interest rates, tax exemptions and YES rewards points while booking a tax-saver FD.
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indusind bank
IndusInd Bank fixed deposit interest rates are effective from August 12, 2022. Subject to the most recent adjustment, the bank is now offering an interest rate of 7.50% on its Indus Tax Saver Scheme (5 Years). Senior Individual IndusInd Bank Minimum Rs. One can open a tax-saving FD account by depositing a minimum amount of Rs. Rs.10,000 up to 1.5 lakh per financial year.
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Tax saving FDs have a lock-in period of five years, which is much less than the lock-in time for other tax saving instruments like PPF accounts. Depending on your tax bracket, residents of India or Hindu Undivided Families (HUFs) may be able to claim a tax deduction of up to Rs. 1.5 lakh deposited in a tax saving fixed deposit under section 80C of the Income Tax Act. As a result, by applying only appropriate tax-saving investments, you can save up to Rs. 46,800 in taxation under section 80C with 4% cess if you are in the highest tax category (30%) and deposit Rs. 1.5 lakh annually in tax saving instrument.
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