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Want to opt for tax-saving fixed deposits? These banks are offering up to 7.25% interest

If you are an investor who is risk-averse and you come under a lower tax bracket, then you can give tax-saving fixed deposits (FDs) a try. Under Section 80C, you can claim investments of up to Rs 1.5 lakh for tax deduction. Interest rates on tax-saving FDs have been hiked by some banks after the four consecutive repo rate hikes by the Reserve Bank of India (RBI) this year. Small finance banks as well as smaller and new private banks are providing interest rates up to 7.25 percent on tax-saving FDs. Tax-saving FDs have a five-year lock-in period and premature withdrawal is not allowed. However, you should not just invest for the tax-saving purpose.

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The tax-saving FDs can also aid you in achieving your financial goals. According to Bankbazaar.com, here are some of the banks that are offering up to 7.25 percent interest on tax-saving fixed deposits:

Deutsche Bank

This bank is providing interest rates of up to 7 percent on tax-saving FDs, the best interest rates among foreign banks.

DCB Bank

Interest rates of up to 7.25 percent are being offered by this lender on tax-saving FDs. Investing Rs 1.5 lakh will lead to a total of Rs 2.15 lakh in five years.

Union Bank

This bank is giving a 6.7 percent interest rate on tax-saving term deposits. If you deposit a sum of Rs 1.5 lakh, it will grow to Rs 2.09 lakh in five years.

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AU Small Finance Bank

A 6.95 percent interest is being given by this bank on tax-saving term deposits. AU Small Finance Bank is offering the best interest rates among small finance banks. An amount of Rs 1.5 lakh will amount to Rs 2.12 lakh in a period of five years.

RBL Bank

On tax-saving FDs, investors can earn up to 6.55 percent interest. If you deposit Rs 1.5 lakh, then it will grow to Rs 2.08 lakh in five years.

Canara Bank

Canara Bank is providing an interest rate of up to 6.5 percent on tax-saving FD. In 5 years, an invested sum of Rs 1.5 lakh would amount to Rs 2.07 lakh.

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