Synopsis: Emphasizing tax-saving bank FDs, the article advises careful investment planning before the March 31 deadline, highlighting competitive rates.
Bank fixed deposits for tax-saving are favored by individuals in lower tax brackets and those nearing retirement, prioritizing capital preservation. Axis Bank, HDFC Bank, and ICICI Bank offer competitive interest rates.
The tax-saving deadline is approaching, with March 31 marking the last day for investments for FY 2023-24. If you haven't initiated tax planning, it's time to do so. Select investments carefully based on your risk tolerance and financial objectives. Options include PPF, NPS, SSY, ELSS through monthly SIPs, EPF, tax-saving FDs, or life insurance premiums.
Tax-saving FDs are suitable for risk-averse investors and individuals in lower tax brackets.
We've researched the rates from the top 10 banks by deposits, focusing on deposits under Rs 1 crore. Interest is compounded quarterly, and the data, compiled by Bankbazaar, is current as of February 19, 2024.
Axis Bank, HDFC Bank, and ICICI Bank offer a 7% interest rate on five-year tax-saving FDs. Investing Rs 1.5 lakh for five years will yield Rs 2.12 lakh.
Canara Bank provides a 6.7% interest rate, resulting in Rs 2.09 lakh.
Bank of Baroda, Punjab National Bank, State Bank of India, and Union Bank of India offer 6.5%, yielding Rs 2.07 lakh.
Indian Bank offers 6.25%, resulting in Rs 2.05 lakh, and Bank of India provides 6%, yielding Rs 2.02 lakh.
The DICGC a.k.a Deposit Insurance and Credit Guarantee Corporation, a subsidiary of the RBI, guarantees fixed deposits up to Rs 5 lakh.
