It is that time of the year when you might be thinking about buying some last-minute tax-saving schemes to save more income tax on your aggregate income. Banks, public and private, offer tax-saving fixed deposits for the investors by which investors can save a maximum of up to Rs 1.5 lakh per year under Section 80 C. Many taxpayers invest in banks’ tax-saving fixed deposits as a last-minute option.
Similarly, to save income tax, taxpayers can also opt for some of the schemes offered by the post office, which have a term of five years and are valid under Section 80 C of the Income Tax Act of India.
Here’s a look at some of the bank FDs and post offices along with their interest rates.
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Bank FDs
Several banks have been offering attractive interest rates on Tax Saving FDs since the Reserve Bank of India (RBI) revised its repo rate. The RBI has revised the repo rate by a cumulative 250 basis points to 6.50 per cent since May 2022.
On the back of it, the banks have revised their FD rates. At present, DCB Bank is offering the highest interest rate of 8.1 per cent, while Axis Bank and IndusInd Bank offer a rate of 7.75 per cent.
Yes Bank, HDFC Bank, ICICI Bank, and IDFC First Bank are offering a rate of 7.5 per cent.
While Bank of Baroda and PNB Bank offer 7.15 per cent, 7.5 per cent, and 7 per cent interest rates, respectively. SBI’s interest rate for 5-year FD is 6.50 per cent.
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Post Office tax savings schemes (5 years)
1. National Savings Certificates (NSC)
Post Office’s National Savings Certificate (NSC) is a fixed-income investment scheme, which is backed by the Centre. The scheme has a maturity period of 5 years. The current interest rate is 7 per cent. One can invest as small as Rs 100 as an initial investment. The scheme has no upper limit.
2. National Savings Time Deposit Account
Post Office’s National Savings Time Deposit Account are very similar to bank fixed deposits. The interest rate for 5-year term deposit for this quarter is 7 per cent. The minimum investment is Rs 1000, and there is no limit. The account holder’s savings account will be credited with the yearly interest.
The interest rate is revised every three months just like other small savings plans backed by the Government of India.
3. Senior Citizen Savings Scheme
Besides, these abovementioned schemes, senior citizens can invest in Senior Citizen Savings Scheme. The minimum and maximum investment limits are Rs 1,000 and Rs 15 lakh, respectively. It has a five-year term, which can be renewed once it reaches maturity for an additional three years. The Senior Citizen Savings Scheme offers an interest rate of 8 per cent a year for deposits after the Centre revised its interest rate for the January-December quarter.
