Learn about Tax Saver Fixed Deposit (FD), a special type of fixed deposit that allows you to save tax under the section 80C of Indian Income Tax Act.
What is a Tax Saver FD?
Tax Saver FD is a special fixed deposit opened in a bank which qualifies as an investment under section 80C of Income Tax Act.
Can you close the deposit before the end of five years?
No. Tax Saver FD cannot be closed before the end of five years.
Is the interest taxable?
Yes, Interest earned is taxable.
Where can you open a Tax Saver FD?
You can open it in any leading banks like SBI and ICICI Bank.
Varies across banks.
You have to check the bank to find the current Tax Saver FD interest rate.
Usually it is similar to the interest you would get with similar duration Fixed Deposits.
Do Senior Citizens get a higher interest rate?
Yes. Senior citizens usually get 0.5% more interest.
However you need to check with your bank website for details.
Who can open a Tax Saver FD?
(1) A resident individual over 18 years of age with a PAN number
(2) HUF with a PAN number
Can it be opened as a joint-account?
Yes. In that case, only the first holder can claim the investment against section 80C of Income Tax Act.
How much money can be invested?
You can invest a maximum of 1,50,000 in a financial year.
The minimum amount differs across different banks. Please check your bank website for details.
Can I get a loan against Tax Saver FD?
Where can I find further information?
- HDFC Tax Saver FD
- ICICI Bank Tax Saver FD FAQs
Disclaimer: “Investors are advised to make their own assessment before acting on the information.”