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Save Tax and Build Wealth: 10 banks that offer up to 6.75% interest on tax-saving fixed deposits

Small finance banks and smaller private banks top the FD interest rate charts on tax-saving deposits

May 05, 2022 / 09:55 AM IST
Most of us procrastinate our tax-saving investments till the last minute, typically between January - March, every year. But it’s a good financial practice to start at the beginning of a new financial year. Risk-averse investors and those in lower tax brackets can look at tax-saving fixed deposits (FDs). Recently, some banks have hiked interest rates on fixed deposits. These banks have increased FD rates, as inflation rises. But particularly, small finance banks and smaller private-sector banks offer interest rates up to 6.75 percent on tax-saving FDs, data compiled by  BankBazaar  shows. Here are the banks offering the best interest on tax-saving deposits.
Most of us procrastinate our tax-saving investments till the last minute, typically between January - March, every year. But it’s a good financial practice to start at the beginning of a new financial year. Risk-averse investors and those in lower tax brackets can look at tax-saving fixed deposits (FDs). Recently, some banks have hiked interest rates on fixed deposits. These banks have increased FD rates, as inflation rises. But particularly, small finance banks and smaller private-sector banks offer interest rates up to 6.75 percent on tax-saving FDs, data compiled by BankBazaar shows. Here are the banks offering the best interest on tax-saving deposits.
Investments of up to Rs 1.5 lakh can be claimed for tax deduction under section 80C of the income tax Act but don’t just invest to save tax. Your tax–saving FDs must fit your financial plan. Tax-saving FDs have a lock-in period of five years and premature withdrawals are not allowed.
Investments of up to Rs 1.5 lakh can be claimed for tax deduction under section 80C of the income tax Act but don’t just invest to save tax. Your tax–saving FDs must fit your financial plan. Tax-saving FDs have a lock-in period of five years and premature withdrawals are not allowed.

AU Small Finance Bank
AU Small Finance Bank and Suryoday Small Finance Bank offer interest rates of up to 6.75 percent on tax-saving deposits. Among small finance banks, these banks offer the best interest rates. A sum of Rs 1.5 lakh invested grows to Rs 2.10 lakh in five years.
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IndusInd Bank offers interest rates of up to 6.5 percent on tax-saving deposits. Among private banks, this offers the best interest rates. A sum of Rs 1.5 lakh invested grows to Rs 2.07 lakh in five years.
Ujjivan Small Finance Bank
Ujjivan Small Finance Bank offers interest rates of up to 6.4 percent on tax-saving deposits. A sum of Rs 1.5 lakh invested grows to Rs 2.06 lakh in five years.
RBL Bank
RBL Bank is offering interest rates up to 6.3 percent on tax-saving deposits. A sum of Rs 1.5 lakh grows to Rs 2.05 lakh in five years.
Deutsche Bank,  DCB Bank ,  IDFC First Bank  and  Yes Bank  offer interest rates up to 6.25 percent on tax-saving deposits. A sum of Rs 1.5 lakh grows to Rs 2.05 lakh in five years.
Deutsche Bank, DCB Bank, IDFC First Bank and Yes Bank offer interest rates up to 6.25 percent on tax-saving deposits. A sum of Rs 1.5 lakh grows to Rs 2.05 lakh in five years.
 Equitas Small Finance Bank  is offering interest rates up to 6 percent on tax-saving deposits. A sum of Rs 1.5 lakh grows to Rs 2.02 lakh in five years.
Equitas Small Finance Bank is offering interest rates up to 6 percent on tax-saving deposits. A sum of Rs 1.5 lakh grows to Rs 2.02 lakh in five years.
These small finance banks and smaller private banks are offering higher interest rates to garner new deposits. The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.
These small finance banks and smaller private banks are offering higher interest rates to garner new deposits. The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.
The data as of 6 April 2022 has been compiled from websites of the banks. BankBazaar has accounted for FDs belonging to only those foreign, private, small finance and public sector banks that are listed on the BSE. Banks, for which data is not available on their websites, were not considered. The rates are for tax-saving five-year FDs for non-senior citizens.
The data as of 6 April 2022 has been compiled from websites of the banks. BankBazaar has accounted for FDs belonging to only those foreign, private, small finance and public sector banks that are listed on the BSE. Banks, for which data is not available on their websites, were not considered. The rates are for tax-saving five-year FDs for non-senior citizens.
Hiral Thanawala is a personal finance journalist with 9 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
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