Tax-planning shouldn't wait till the end of the financial year. Financial planners advise that you should start planning for your tax-saving investments as soon as the financial year begins. Your options include Public Provident Fund (PPF), National Pension System (NPS), Sukanya Samriddhi Yojana (SSY), monthly SIP in equity-linked savings schemes (ELSS), Employees’ Provident Fund (EPF), tax saving fixed deposits (FDs) or by paying life insurance premiums.
Risk-averse investors and those in lower tax brackets can look at tax-saving FDs. Remember, your money gets locked in for five years.
The key parameter for identifying these banks is their term deposit holdings. The best rates offered by these banks on tax-saving FDs (of up to Rs 1 crore). The value is calculated based on quarterly compounding of interest. Bankbazaar has compiled the data. The data is as of June 26, 2024.
Axis Bank, HDFC Bank and ICICI Bank offer 7 percent interest rate on tax-saving FDs. Rs 1.5 lakh invested for five years in tax-saving FDs will grow to Rs 2.12 lakh.
Also explore: High-return FDs offered by trusted banks and NBFCs on the Moneycontrol app.
Canara Bank offers a 6.70 percent interest rate on tax-saving FDs. Rs 1.5 lakh invested for five years in tax-saving FDs will grow to Rs 2.09 lakh.
Bank of Baroda, Punjab National Bank, State Bank of India and Union Bank of India offer 6.5 percent interest rate on tax-saving FDs. Rs 1.5 lakh invested for five years in tax-saving FDs will grow to Rs 2.07 lakh.
Indian Bank offers a 6.25 percent interest rate on tax-saving FDs. Rs 1.5 lakh invested for five years in tax-saving FDs will grow to Rs 2.05 lakh.
Bank of India offers a 6 percent interest rate on tax-saving FDs. Rs 1.5 lakh invested for five years in tax-saving FDs will grow to Rs 2.02 lakh.
The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.
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