These banks offer interest rates of up to 7% on tax-saving FDs
Tax-saving bank fixed deposits is a popular instrument for those in the lower tax brackets and also who are closer to their retirement, for capital protection. Leading banks such as Axis Bank, HDFC Bank and ICICI Bank are offering the best interest rates.
The tax-saving season is on and March 31 is the last date to make tax-saving investments for the financial year 2023-24. If you haven’t yet started your tax planning process yet, then you ought to plan right away. Choose your investment wisely, depending on your risk profile and financial goals. 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.
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We've taken the 10 largest banks by deposits into account and rates have been considered only for those deposits of less than Rs 1 crore. The value is calculated based on quarterly compounding of interest. Bankbazaar has compiled the data. The data as of February 19, 2024.
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Axis Bank, HDFC Bank and ICICI Bank Interest rate on five-year tax saving FDs: 7% Rs 1.5 lakh invested for five years will grow to Rs 2.12 lakh
Canara Bank Interest rate on five-year tax saving FDs: 6.7% Rs 1.5 lakh invested for five years 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 Interest rate on five-year tax saving FDs: 6.5% Rs 1.5 lakh invested for five years will grow to Rs 2.07 lakh
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Indian Bank Interest rate on five-year tax saving FDs: 6.25% Rs 1.5 lakh invested for five years will grow to Rs 2.05 lakh
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Bank of India Interest rate on five-year tax saving FDs: 6% Rs 1.5 lakh invested for five years 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.
Hiral Thanawala is a personal finance journalist with over 10 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
