What is Tax Saving Fixed Deposit - Benefits & Eligibility

Fixed deposit is a type of deposit where an investment is made for a specific time period. Tax-saving fixed deposit is one where investment amount can get deduction under Section 80C of the Indian Income Tax Act. These deposits can be individual as well as joint. The tenure of these deposits is generally five years. A maximum deduction of Rs 1.5 lakh can be claimed by someone who invested in a tax saving fixed deposit FDs can be termed as financial tools that offer higher rate of interest than saving accounts. They are considered to be one of the most secure investment and tax saving options available. Almost all banks offer fixed deposits, so before investing, it is important to weigh the pros and cons.

Advantages of tax saving FDs:

Availability - All public and private sector banks offer fixed deposits in India. Now, the same can be done via internet banking.
Assured returns: The interest offered by FD is greater than savings account. Longer the term of FD, greater the returns. All banks have varying interest rates.
No limit on opening FDs: Any number of FDs can be opened at a particular bank or in different banks. The exemption limit of interest on FDs is 1.5 lakh; until the amount reaches there it is free from any taxes.

Eligibility for tax saver FDs:

The depositor should be a citizen of India, or
Member of individuals, HUF (Hindu Undivided family) or senior citizens

Five-Year tax saving FD with AU Small Finance Bank:

The wealth growing option of tax-saving fixed deposit in AU Small Finance Bank is available with a minimum deposit of Rs 1000/- to a maximum amount of Rs 1.5 lakh annually. AU Small Finance Bank’s tax saving fixed deposit service offers great returns with tax saving. The regular tax saving option is available for individuals, HUFs and minors. The tax benefit will be availed by the primary holder, in case of joint deposits.

Fixed deposits are one of the safest investment options which also offer tax saving benefit. The service can be used without any high maintenance charges and the facility of nominations is also provided.

Learn more about how does bank calculate interest on FD(Fixed Deposits) and also get to know what is a fixed deposit

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