4 Best Tax Saving Fixed Deposits To Invest In 2021
[ad_1]
Read More/Less
5-Year Tax Saving Fixed Deposits of Small Finance Banks
Amid the current low-interest-rate regime of banks, small finance banks are promising the best interest rates than leading private and public sector banks on both short-term and long-term deposits. By investing in a fixed deposit scheme of small finance banks one would not only get good returns, tax benefits but also his or her deposits will enjoy an insurance cover up to Rs 5 lakhs by DICGC. Here are the top 5 small finance banks which are currently promising the best interest rates on 5-year fixed deposits or tax-saving deposits of less than Rs 2 Cr.
| Banks | Regular FD Rates | Senior Citizen FD Rates |
|---|---|---|
| Ujjivan Small Finance Bank | 6.75% | 7.25% |
| Jana Small Finance Bank | 6.50% | 7.00% |
| Equitas Small Finance Bank | 6.25% | 6.75% |
| Suryoday Small Finance Bank | 6.25% | 6.50% |
| Utkarsh Small Finance Bank | 6.00% | 6.50% |
| Source: Bank Websites |
5 Year Tax Saving Fixed Deposits of Private Sector Banks
Here are the top 5 private sector banks promising better interest rates on tax-saving fixed deposits of less than Rs 2 Cr.
| Banks | Regular FD Rates | Senior Citizen FD Rates |
|---|---|---|
| RBL Bank | 6.50% | 7.00% |
| DCB Bank | 6.50% | 7.00% |
| Yes Bank | 6.25% | 7.00% |
| IndusInd Bank | 6.00% | 6.50% |
| Karur Vysya Bank | 6.00% | 6.00% |
| Source: Bank Websites |
5 Year Tax Saving Fixed Deposits of Public Sector Banks
For a deposit amount of less than Rs 2 Cr, here are the top 5 commercial banks promising good returns on tax-saving fixed deposits.
| Banks | Regular FD Rates | Senior Citizen FD Rates |
|---|---|---|
| Union Bank | 5.50% | 6.00% |
| Canara Bank | 5.50% | 6.00% |
| State Bank of India | 5.30% | 5.80% |
| Punjab & Sind Bank | 5.30% | 5.80% |
| Bank of India | 5.15% | 5.65% |
| Source: Bank Websites |
Post Office Time Deposit
After fixed deposits of banks, small savings schemes are the most secure investment under the debt category. Among all the small savings schemes, the post office time deposit account functions exactly like a fixed deposit of a bank where you can invest for a term of 1 year to 5 years. You can open a post office time deposit account at any post office by making an initial deposit of Rs 1000/- and in multiple of 100 with no upper limit. Section 80C of the Income Tax Act of 1961 refers to investments made under a 5-year TD.
The deposit amount along with the accumulated interest rate in this term deposit account is payable after 1 year, 2 years, 3 years, and 5 years from the date of account opening. The government has recently announced that interest rates on small savings accounts would remain unchanged for the quarter ending September 30, 2021. According to the circular, post office time deposit accounts would continue to pay 5.5 percent interest on deposits of one to three years, and 6.7 percent on deposits of five years.
[ad_2]