Invest in Tax saving fixed deposits (FD) schemes offering high interest
If you are planning to save tax by December, start saving money from this month itself. Tax Saving FD schemes offer attractive interest rates now which may continue for another couple of months. I have done a comprehensive list of Tax Saving Fixed deposit interest rates and you can choose the best one among the list. This post is based on request made by Prathap on "Suggest a topic".
Tax Saving FD schemes
If you want to save tax on your salary, you can invest up to ₹ 100,000 u/s 80C and get income tax exemption. Out of the all available tax saving schemes, Tax Saving FD schemes are favorite one for many of us.
Also read: How Salary individuals can save income tax u/s 80C and beyond?
High Interest: Out of all tax saving options available to you u/s 80C, Bank FD schemes offer fixed interest.
Principal is protected: If you consider ELSS tax saving scheme, there is risk of capital erosion, however investing in Bank tax saving FD, there is no such risk.
Tenure: Out of available secured tax saving options u/s 80C, tax saving bank FD’s are the only options available which are 5 years period paying high interest. Though PPF also offers high interest, the maturity of the PPF is 15 years. NSC tenure might be comparable, but interest rates are low.
Tax Saving FD interest rates as of 3-Oct-13
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Suresh
Invest in Tax saving fixed deposits (FD) schemes offering high interest
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42 comments
Add a comment ↓Hi…
which is a good month to invest in a tax saving fixed deposit?
tax saving fixed deposits
tax saving fixed deposit
I have some doubts if possible please try to explain…
1. If i invest 100000 in SBI as FD for five years and i showed this as tax excemption. Is it possible for me to withdraw the FD after 1 or 2 months.
2. is it possible to invest more than 200000 as FD for tax excemption.
3. is it allowed for tax excemption if i invest more than one FD in one account.
Hi Ame, 1) You cannot withdraw tax saving FD before 5 years 2) Even if you invest Rs 2 Lakhs, you would get only Rs 1.5 laksh as tax exemption u/s 80C. 3) Yes, you can invest in multiple tax saving FD schemes, however maximum exemption comes to RS 1.5 Lakhs u/s 80c.
Sir,
I have a small doubt. My book states the following
If any amount including interest accrued is withdrawn by the assessee from his account before the expiry of 5 yrs ,the amount shall be deemed to be the income of the assessee in the year of withdrawal. However the following amounts shall not be included :
Interest already included in the total income of the assessee of the previous or years preceding such previous year.
Can you please explain what the last two lines mean?
Please clarify my doubt whether intt. Earned on bank fd tax saving scheme is taxable or not.thanks.
Interest earned on bank FD is taxable
I HAVE TAKEN SBI TAX SAVING FD FOR 1 LAKH IN 2012-13.CAN I SHOW THAT AMOUNT AGAINST 80C THIS FINACIAL YEAR 2014-15.
Sridevi, Any Tax sving FD scheme taken in financial year is to be shown only in that financial year under 80C deduction. You cannot show now.
Dear suresh I am an central gov employe coming under PB 3 structure, looking forward for investing money.Following are my exisisting priorities
a) education loan repayment 15000 pm
b) lic 14500 quaterly
Can spare around 10000 monthly for investments
Kindly advic were to start with investments for tax exemptions
a) MF
b)ETF gold Or any other domain.
Least appetite for risk.
Regards jashin
You can invest in any of the funds indicated in this article. https://myinvestmentideas.com/2013/11/top-5-tax-saving-mutual-funds-elss-in-india-to-invest-for-2014/
Hi suresh,
Thanks for the detailed info as always. I had a query. If i invest 50,000 per year for next 5 years in tax saver FDs, then my annualised interest(approx.) will be in the order 5,000(2014) , 10,000(2015) , 15,000(2016) , 20,000(2017) , 25,000(2018). How will TDS calculations be made?
Will it give any advanatge, if i open these Tax Saver FDs in different banks / branches?
Akshay, Your bank would provide interest paid and TDS deducted statement every year
Can I avoid tds by opening fds in different banks?
Can I file returns if tds is deducted and my income is not taxable?
No Akshay
Dear Suresh, Thanks for the detailed info about Tax Saver Fixed Deposit (FD). I have a question. Can we
invest in such a Tax Saver FD in the name of the spouse and still claim it under Sec 80c in our IT return? Like we can for Public Provident Fund (PPF)?
No Jayaraman. You should invest in your name to get 80c benefit
Hello Sir,
Thanks for the very good comparision about FD.
I am Salaried person. Yearly salary is 7 lakh and i have already taken Jeevan anand – yearly premium around Rs107000/-. Third premium i am going to pay now (Augest 2014). I heard that This LIC related tax saving schemes are not that much benificial compared to FD and Mutual Fund. In the recent Budget tax exemption gone upto 2.5 Lakh, so i have another 40 thousand to save. Now my question is
1) can i cancel my LIC jeevan anand and change it to FD or MF?
2) what is the expected Loss for me if i do that?
3) If i cancel and start FD or MF – suggest me the best options available.
Thank you so much in advance.
Selva, pls see my comments 1) Before cancelling, consider taking adequate term insurance 2) Your loss may be very less comparing to what you would be loosing in future 3) Invest in largecap or diversified funds like ICICI Pru focussed blue chip fund,HDFC Top-200, Birla SL Frontline fund, BNPP Equity fund, UTI Opps fund and Quantum long term equity fund. You can pick any of these funds.
Sir Thanks For Your Right Suggetion.
As you said I am planning to take SBI Term Insurance.
What about my cancellation? What is the ideal way to cancel LIC Jeevan Anand.
After 3 years – Close or leave it unpaid?
which one will give me very less loss?
Thanks for your reply
Selva, 1) First take SBI term insurance. 2) Approach LIC and ask for both these options i.e. exit or discontinue, but leave it unpaid 3) This would give you an idea whether to exit or not
Hello sir
i like to invest( canra bank) FD,3Lakh for one year / Tex Free or not
Mohammed, If you invest up to Rs 1 Lakh in such Canara Tax saver MF, you would get tax exemption u/s 80C. However returns from such ELSS would be taxed based on mutual funds taxation rules.
I am a NRI. I am looking for a steady income of 1lakhs per month. How much and where should I invest?
Hi Peter, In such case you can invest in NRE FD schemes. Majority of Indian banks are offering up to 9% tax free income. If you want Rs 1 L per month. You need