Tax saving fixed deposits: Key features, interest rate

Taxation is an integral part of one’s finances. There are several investment options available in the market that help investors in building joint wealth by saving taxes. Among other things, deposits still save tax (FD) is considered one of the safest savings options.

The amount invested in this case is fully protected and returns are also guaranteed.FD savings tax, a special category of fixed deposits, enables investors to claim reduction based on the 80C section of the Income Tax Law. Each investor can claim the maximum reduction of RS 1. 

5 LAKH by investing in a fixed deposit saving tax.In the case of a joint account, only the first holder is qualified to be reduced from income based on the 80C section of the Income Tax LaIndividuals and HUF (Hindu families are not divided) can invest in the Tax Saving Deposit (FD) scheme.

One can open FD tax savings in one joint account.This tax saving FD has a minimum locking period of five years. Investors can open an online tax savings account or by visiting bank branches.Different banks offer different interest rates on tax savings FD. Interest rates for Indian and HUF citizens vary from banks to b

Interest on the deposit of income tax savings is paid every month or quarterly. The amount of interest obtained can also be invested again if investors want it.

They came with a 5 -year -old period. Just like other fixed deposits, the return of FD tax savings is determined for the FD period. However, investors cannot make premature or partial withdrawals from tax saver deposits, said Sujit Bangar, founder at Taxbuddy.com.

Nomination facilities are available for this FD. However, there are no nominated facilities available if the deposit is applied to and held by or on behalf of a minor.

Anyone who is looking for a shorter locking period and seeking returns guaranteed with the tax savings option must invest in a fixed deposit to save tax, according to Clear.