Tax-saving FD interest rates: SBI vs HDFC Bank vs ICICI Bank

Fixed deposit (FD) is one of the safest investment options which offers a fixed return. It is still one of the popular investment avenues for many middle-class Indians despite poor returns. For taxpayers tax-saving fixed deposits is one of the best schemes which is safe and offers good returns with tax savings. The interest rates varies from bank to bank.

Features

— Tax-saving FDs come with a lock-in period of five years and more.

— A person can not withdraw the money from the FD before the lock-in period in case of any emergency.

— Loans against tax-saving fixed deposits are not allowed.

— The interest on FDs will be paid monthly, quarterly, or annually.

— Investments made for 5 years are tax-exempt under Section 80C of the Income Tax Act

— The interest earned from a tax-saving FD is taxable. The interest is added to the annual income and is taxable according to the tax bracket.

— The maximum amount to be deposited in a tax saving FD is Rs 1.5 lakh in a financial year.

Latest interest rates

The interest rates on Tax-Saving Fixed Deposit varies from bank to bank. Take a look at interest rates offering by the country’s three major commercial banks- State Bank of India (SBI), HDFC Bank and ICICI Bank.

SBI 

State Bank of India, the country’s largest lender, offers tax savings scheme to its customers. The minimum deposit amount under this scheme is Rs 1,000 and in multiples of Rs 100 thereafter. The minimum period of deposit is 5 years and the maximum period 10 years. In general circumstances no deposit shall be encashed before the expiry of lock in a period of five years. Rate of interest as applicable to term deposits i.e 5.40% for the public. Senior citizens can avail 0.50% additional interest on their fixed deposit.

HDFC Bank 

HDFC Bank, the country’s largest private sector bank, also offers tax saving fixed deposit options. One can open this account depositing just Rs 100. The tenure and lock in periods is 5 years. Now HDFC Bank offers an interest rate of 5.30% per annum on tax saving FD to the general public.

ICICI Bank

The ICICI Bank tax saver fixed deposit offers deposits the opportunity to earn 5.3% interest. The minimum investment amount is Rs 10,000 for a duration of five years.