Fixed Deposits for Tax-Saving Senior Citizens Offers Interest Rates of up to 7.25% – Check the Latest FD Rates
Seniors generally prefer to invest their money in risk-free financial products offering lucrative interest rates. Although there are several avenues to explore, fixed deposits (FDs) remain one of the preferred choices for seniors because FDs offer guaranteed returns without any financial risk. One of the concerns of seniors is often tax planning. Without tax planning, your returns on any investment can plummet.
Tax-saving term deposits are a financial option that allows you to invest to save tax under Section 80C of the Income Tax Act. The minimum term for a term deposit under the Tax Savings Scheme is five years. Older people enjoy a higher interest rate when they choose to put their money in an FD. Tax-advantaged DFs offer a higher interest rate to senior citizens and also help them save tax.
Section 80C of the Income Tax Act allows you to claim a tax deduction of up to Rs 1.5 lakh if you put your money in tax-saving FDs.
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Tax-saving fixed deposits can be a good option if a senior wants to save money. It would be best to remember that early withdrawals in tax-saving DFs are not allowed as the scheme has a tenure of between 5 and 10 years. You can choose based on your financial goals.
It is advisable to open an FD account in a bank where you have your savings account. Yet, you can choose any other financial institution where you get lucrative interest rates. When your tax FD matures, the amount is transferred to your savings account.
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You can compare interest rates from different financial institutions before opening a tax savings account. You also need to see how much money you need to meet your financial goals. It is easy to calculate the total amount you will get at maturity. If you are still unsure about the tax saving and overdue amount, discuss it with your preferred financial institutions before opening an FD account.
Below are more than 30 financial institutions and their tax-saving DF interest rates. It helps you compare interest rates and show how an FD of Rs 1.5 lakh will increase with different interest rates after five years. You can decide according to your financial needs and expectations.
Note: Data as on respective banks’ website as of May 31, 2022;
Interest rates of all listed public and private Indian banks (ESB) taken into account for the compilation of data; Banks whose data is not available on their website are not taken into account. The table only includes tax savings DFs for seniors (excluding super-seniors) for a 5-year term. *Assuming quarterly interest compounding for all banks;
Compiled by BankBazaar.com