Tax Saving FDs with guaranteed returns
Conservative Investors and Fixed Deposits
Conservative investors prefer fixed deposits (FDs) for guaranteed returns on investment
Tax Saving FDs for Extra Benefits
Tax saving FDs offer higher returns and the additional benefit of saving income tax
Tempting Interest Rates
Commercial banks are currently offering high interest rates on fixed deposits, attracting investors to lock their savings
What are Tax Saving FDs?
Tax saving FDs allow investors to save tax under section 80C of the Income Tax (I-T) Act with a lock-in period of five years
Joint Accounts and Tax Exemption
Tax exemption for joint account holders of tax-saving FDs is applicable only to the first holder
Tax exemption for joint account holders of tax-saving FDs is applicable only to the first holder
Tax-free FDs enable investors to save income tax up to ₹1,50,000 per annum, but this threshold applies cumulatively to all 80C eligible investments
Tax Deduction and Interest Income
Interest earned on tax-saving FDs is taxable, and banks deduct TDS when it exceeds ₹40,000 (₹50,000 for senior citizens)
Assured Returns and Bank Guarantees
Tax-free FDs, like regular FDs, provide assured returns and bank guarantees under DICGC, ensuring investors against defaults
Higher Returns with Tax Savings
Tax-free deposits offer relatively higher returns than regular FDs, and the tax-saving feature further enhances the returns
Not Collateral for Loans
Tax-saving FDs are generally not considered collateral for availing loan facilities