These banks offer highest interest rate on tax saving FDs
Most banks often provide tax-saving FDs with a choice of cumulative interest or non-cumulative choices.
Fixed Deposit schemes for Indian investors have been the most popular investment option. FDs provide a steady and guaranteed rate of return in contrast to stocks and other investment vehicles. Investors also have the possibility to save some extra money using tax-saving FD schemes.
Tax-saving Fixed deposits have a fixed tenure of five years. These tax-saving FDs offer the investor a tax deduction under Section 80 of the Income-tax Act of 1961 (up to Rs 1.5 lakh in a fiscal year). The minimum investment amount for a tax-saving FD differs from bank to bank.
Here is a list of some of the banks with the best interest rates on these FDs:
IndusInd Bank
On investments subject to taxation for a period of five years, the IndusInd Bank offers an interest rate of 6.5%. Senior folks do, however, receive an additional 0.5% return on the programme.
RBL Bank
RBL Bank offers the greatest rate of return for 2- to 3-year FDs at 6.5 percent, although the interest rate on tax-saving plans is somewhat lower at 6.3 percent. Seniors who invest in RBL Bank's tax-saving FDs receive a return of 6.8.
IDFC First Bank
For savings under Rs 2 crore, IDFC First Bank's tax saver deposit return rate is 6.25 percent. Senior citizens are entitled to a higher rate of return of 0.5%.
HDFC and ICICI Bank
HDFC Bank and ICICI Bank are offering interest rates of up to 6.1 percent on tax-saving FDs. A sum of Rs 1.5 lakh grows to Rs 2.03 lakh in five years.