Tax Saving Fixed Deposit is one of the most popular options among conservative investors who want to reduce their tax burden. This is because, as their name suggests, tax-saving fixed deposits are subject to a lock-in requirement of 5 years and enable tax deduction of only up to Rs. 1.5 lakh every financial year under section 80C. Tax-saving FDs can be opened with monthly and quarterly payouts, and interest rates vary depending on who is applying, from general public to senior citizens. Amid rising interest rates on bank fixed deposits, individuals can look at the below listed five public sector banks which as per our own research offer the highest interest rates on tax-saving FDs in the market.
Union Bank of India
First on our list is Union Bank of India, which has changed the interest rates on its fixed deposits (FDs) with effect from November 25, 2022. The bank currently offers 6.70% interest rate on tax-saving fixed deposits with a tenure of 5 years. , and senior individuals are eligible for an additional 50 basis points of interest, bringing the total interest rate to 7.20%.
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Canara Bank
Canara Bank, which ranks second on our list in terms of higher rates, revised its interest rates with effect from October 31, 2022. 5 years. “Bank Canara offers 6.50% p.a. for Tax Saver Deposit Scheme (General). Maximum Deposit Acceptable 1.50 lakh,” mentioned Canara Bank on its website.
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Indian Overseas Bank
Indian Overseas Bank is the third bank in terms of better interest rates on tax saving FDs. Interest rates on bank fixed deposits are effective from 10.11.2022. IOB Tax Saver Deposit interest rates are 6.40% for general public, 6.90% for senior citizens and 7.15% for very senior citizens.
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Indian Bank
Indian Bank is the fourth bank in our list in terms of higher tax-saving FD rates. Interest rates on domestic retail term deposits are effective from October 29, 2022. The bank is offering an interest rate of 6.40% for senior citizens and 6.90% on 5-year tax saving FD.
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Bank of India
Bank of India is the fifth bank in terms of higher interest rate on tax saving FD. Bank’s fixed deposit interest rates are effective from 1.11.2022. The bank is offering an interest rate of 6.25 per cent on 5-year tax saving FD. Bank of India mentions on its website that “Senior citizens to be paid an additional premium of 25 bps over and above the existing 50 bps for all tenors of 3 years and above on their Retail TDs (less than Rs. 2 cr) Will go ie 75 bps.”
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