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5 things you need to know about tax saving fixed deposits

When you start investing your hard-earned money, you don’t just invest to multiply your wealth, you also do so in order to save on taxes. Where you invest your money is a very important aspect when it comes to tax savings. Currently, under Section 80C of the Income Tax Act, citizens of India can claim tax deduction for investments up to INR 1.5 lakh per financial year by investing in tax-saving fixed deposits (FDs).

Fixed Deposits are a very popular and rewarding investment option for those who want security, decent returns and a trusted way to grow their wealth. Tax Saving Fixed Deposits give you the dual benefit of tax exemption and higher rate of interest on your investment.

Investing in Tax Saving Fixed Deposits is the best choice for investors who don’t want to take any risks with their investment. Apart from being a secure investment instrument, there are several other benefits of investing in Fixed Deposits that you should know about.

  • Tax Saving Fixed Deposits are safe and are good for long-term investments
  • You can invest a lump-sum amount in one go
  • Interest pay-outs happen on monthly, quarterly or annual basis
  • Fixed Deposits enable you to create and grow your wealth over a period of time
  • They are an ideal investment option for those who want to start saving for their retirement
  • You can claim Tax deductions on Tax Saving Fixed Deposits

Have these benefits convinced you that Tax Saving Fixed Deposits are the right option for you? Before you start investing in Tax Saving Fixed Deposits, here are 5 important things you need to know:

1. Only Hindu Undivided Families (HUF) and individuals can invest in Tax Saving Fixed Deposits.

2. Tax Saving Fixed Deposits can be held as single or joint accounts. In the case of joint deposits, the tax benefit under 80C will be available only to the first holder of the deposit.

3. The lock-in period for Tax Saving Fixed Deposits is 5 years. If you close the Fixed Deposit prematurely, you will lose the tax benefit. You also cannot avail a loan against this Fixed Deposits.

4. The interest you earn on Fixed Deposits is taxable depending on your income tax bracket. If you are eligible, you can claim tax exemption by submitting form 15G or 15H.

5. Tax Saving Fixed Deposits earn the same or higher interests as other Fixed Deposits. In fact, RBL Bank offers competitive interest rates, so you get an added benefit of tax saving along with a healthy investment.

If you’re wondering how to go about creating your Tax Saving Fixed Deposits, worry no more. RBL Bank’s Tax Saving Fixed Deposit is not only one of the best in the market, but it also gives you the dual benefits of tax exemption along with high interest rate returns. Click here to read more about our Tax Saving Fixed Deposit


Disclaimer: Articles published on the website are merely indicative and suggestive in nature and do not amount to solicitation. The contents do not guarantee the desired returns and/or results. Reader is advised to exercise discretion and consult independent advisors for achieving desired result. Visitors to this blog/ website w.r.t products & services offered by RBL Bank Limited herein, shall ensure that the comments / feedback posted shall be restricted to the contents published herein and shall not contain such language that may be un-parliamentary or against any religion, caste, section of society, political view etc. While our endeavor is to publish the comments that are submitted, however, all comments/feedback shall be subject to internal review by RBL Bank Limited. We do not guarantee that the comments that are submitted will be published.

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