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Tax Saving FDs: These banks offer interest rates of up to 7% per annum

Tax Saving Fixed Deposit: HDFC Bank, ICICI Bank and State Bank of India offer interest rates between 7 and 6.5 percent on tax-saving FDs.

July 12, 2024 / 15:49 IST
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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.

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Risk-averse investors and those in lower tax brackets can look at tax-saving FDs. Remember, your money gets locked in for five years.

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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.

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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.

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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.

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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.

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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.

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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.

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The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.