If you haven’t started investing for tax saving, then this is the right time. Tax planning should not a task to be completed towards the end of the year. Invest wisely, considering your financial goals. Those in the lower tax brackets find bank FDs more attractive. Amid falling interest rates, smaller private banks offer interest rates of up to 6.30 percent on tax-saving FDs, as per data compiled by BankBazaar. Here are the top private banks offering the best interest on tax-saving deposits.
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Investments of up to Rs 1.5 lakh can be claimed for tax deduction under section 80C of the income tax act. Tax-saving FDs have a lock-in period of five years and premature withdrawals are not allowed.
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RBL Bank is offering interest rates up to 6.30 percent on tax-saving deposits. Among private banks, this bank offers the best interest rates. A sum of Rs 1.5 lakh grows to Rs 2.05 lakh in five years.
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Yes Bank is offering 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.
IDFC First Bank and IndusInd Bank are 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.
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DCB Bank is offering interest rates up to 5.95 percent on tax-saving deposits. A sum of Rs 1.5 lakh grows to Rs 2.02 lakh in five years.
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Axis Bank and Karur Vysya Bank are offering interest rates up to 5.75 percent on tax-saving deposits. A sum of Rs 1.5 lakh grows to Rs 2 lakh in five years.
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The smaller private banks are offering higher interest rates to garner newer 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.
Data compiled as of November 24, 2021 from respective banks' website. BankBazaar has accounted for FDs belonging to only those private banks that are listed on the Bombay stock exchange. Banks, for which data is not available on their respective websites, were not considered. These rates are only of 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.
