Highest Tax Saving Bank Fixed Deposit Rates U/S 80C – December 2018

Tax Saving Fixed Deposits one of the most popular way to save taxes u/s 80C of income tax. These are like normal Fixed Deposit with banks but is labeled as “Tax Saving FD” while making the deposit.

Why you Should Invest?

  1. Convenient to invest. ICICI Bank, SBI, HDFC Bank, etc offers online facility for Tax Saving FD
  2. Redemption on maturity comes directly to your bank account
  3. High Safety – FD up to Rs 1 Lakh is insured

Why you Should Not Invest?

  1. There are lot of competing products like EPF, PPF, ELSS to exaust the investment of Rs 1.5 Lakh u/s 80C
  2. The interest earned is taxable
  3. Cannot be withdrawn prematurely
  4. Cannot be pledged to secure loan or as security

Also Read: Best Tax Saving Investments u/s 80C

Tax Saving Fixed Deposit Interest Rate

As of December 1, 2018 banks are offering 6.00% – 8.25% for general public and 6.50% – 8.75% for Senior Citizens.

  1. The best Tax Saving Fixed Deposit Interest offered is 8.25% for General Public by IDFC Bank
  2. The best Senior citizens Tax Saving Fixed Deposit Interest offered is 8.75% by IDFC Bank
  3. 5 Year NSC at Post Office gives 8.0% interest for both Senior Citizens and general public

The table below lists the banks in alphabetical order with their respective interest rate offer on Tax Saving FDs for General and Senior Citizens.

Click for Best Interest Rate on FDs for General public

Click for Best Interest Rate on FDs for Senior Citizens

The highest Interest Rates have been highlighted:

Bank   General    Senior CitizenScheme Name
Allahabad Bank6.50%6.50%Allahabad Bank Tax Benefit Term Deposit Scheme
Andhra Bank6.50%7.00%AB Tax Saver Deposits
Axis Bank7.00%7.50%Axis Bank Tax Saver Deposits
Bandhan Bank6.40%6.90%Bandhan Bank Tax Saver FD
Bank of Baroda6.70%7.20%Baroda Tax Savings Term Deposit
Bank of India6.35%6.85%Star Sunidhi Tax-Saving Deposit Scheme
Bank of Maharashtra6.50%7.00%Bank of Maharashtra Tax Saver FD
Canara Bank6.20%6.70%Canara Tax Saver Scheme
Catholic Syrian Bank6.50%7.00%CSB Tax Savings Support
Central Bank of India6.50%7.00%CENT Tax Saving Deposit
Citibank6.00%6.50%Citibank Tax Saver FD
City Union Bank7.35%7.35%CUB Tax Saver Gold Deposit
Corporation Bank6.50%7.00%Corp Tax Saver
DCB Bank7.75%8.25%DCB Bank Tax Saver FD
Dena Bank6.30%6.80%Dena Maha Tax Bachat Yojna
Dhanalakshmi Bank6.50%6.50%Dhanam Tax Advantage Deposit
Federal Bank7.25%7.75%Federal Tax Savings Deposit
HDFC Bank7.25%7.75%HDFC Bank Tax Saver FD
ICICI Bank7.25%7.75%ICICI Bank Tax Saver FD
IDBI Bank6.85%7.35%Suvidha Tax Saving Fixed Deposits
IDFC Bank8.25%8.75%IDFC Tax Saving Fixed Deposits
Indian Bank6.50%7.00%IB Tax Saver schemes
Indian Overseas Bank6.80%7.30%IOB Tax Saver Deposit Scheme
Indus Ind Bank7.50%8.00%Indus Tax Saver Scheme
J&K Bank6.50%7.00%Tax Saver Term Deposit Scheme
Karnataka Bank6.90%7.40%KBL – Tax Planner
Karur Vysya Bank7.00%7.00%KVB – Tax Shield Deposits
Kotak Mahindra Bank6.25%6.75%Tax Saving Deposits
Lakshmi Vilas Bank7.75%8.35%Lakshmi Tax Saver Deposits
Oriental Bank of Commerce6.75%7.25%Oriental Bank Tax Saving Term Deposit
Post Office NSC (5 Years)8.00%8.00% National Saving Certificate
Punjab and Sind Bank6.55%7.00%PSB Fixed Deposit Tax-Saver Scheme
Punjab National Bank6.25%6.75%PNB Tax Saver Fixed Deposit Scheme
Ratnakar Bank7.60%8.10%Ratna Tax Saving Scheme
South Indian Bank6.50%7.00%SIB Tax Gain 2006
State Bank of India6.85%7.35%SBI Tax Savings Scheme 2006 (SBITSS)
Syndicate Bank6.50%7.00%SyndTaxShield Deposit Scheme
Tamilnad Mercantile Bank6.90%7.40%TMB TSD (Mullai)
UCO Bank6.60%7.10%UCO Tax Saver Deposit Scheme – 2006
Union Bank of India6.85%7.35%Union Tax Saver
United Bank of India6.00%6.50%United Bank of India Tax Saver FD
Vijaya Bank6.80%7.30%Vijaya Tax Savings Scheme
Yes Bank7.25%7.75%Yes Bank Tax Saver FD

 Source: Bank Websites                                                     Last Updated: December 1, 2018

Download: Free ebook for Income Tax Planning for FY 2018-19

Taxation & TDS – Tax Saving Fixed Deposits:

The interest received on tax Saving Fixed Deposit is fully taxable. The interest income is considered as “income from other sources” for Tax filing and taxed at marginal tax rates applicable.

TDS would be deducted at the rate of 10% of the interest paid, if the interest paid exceeds Rs 10,000 in a financial year. You can see the same in Form 26AS.

In case your income does not exceed taxable slab and so want to avoid TDS, you can submit Form 15G or 15H  when making the deposit. You would also need to submit the form at the start of every financial year to the concerned bank branch.

Also Read: How to Fill Form 15G and 15H?

Key Points – Tax Saving FD:

Below are some of points to keep in mind while investing in Tax Saving Deposits:

  1. As the Tax Saving FD scheme was introduced in Budget of 2006, it’s also known as Tax Saving Deposit scheme 2006 (Notification Number 203/2006 and SO1220 (E) dated 28/07/2006)
  2. Most of the banks accept deposit of 5 Years only. However there are banks with deposit tenures of more than 5 Years
  3. You can deposit on either Single or Joint name. However benefit of tax deduction is available for first holder only.
  4. Most banks offer interest rate which is similar to their 5 years term deposits. Only a few banks give slightly higher interest rate for their Tax Saving Fixed Deposits
  5. Most banks give Senior citizens and their staff members additional interest of 0.25% to 0.5%
  6. Depositor can opt for either cumulative or non-cumulative way of crediting periodical interest
  7. Don’t be mislead by banks advertisements about their yield on Tax Saving FDs. Those are manipulative calculations
  8. Be cautious of small co-operative banks as they have higher risk than bigger private and public sector banks
  9. Depositor gets benefit U/s.80C of the Income Tax Act. 1961
  10. Minimum deposit is Rs.100 and in multiples thereof
  11. Maximum deposit in a Financial Year Rs.1,50,000/- [i.e., 1st April to 31st March of the following calendar year]
  12. Deposits cannot be withdrawn prematurely
  13. Deposits cannot be pledged to secure loan or as security
Highest Tax Saving Bank Fixed Deposit Rates – 80C – December 2018

Highest Tax Saving Bank Fixed Deposit Rates – 80C – December 2018

Disclaimer: We have tried to keep interest rates up to date, but as these change frequently you are advised to check with the bank before investing. Also it would be great if you can point out any errors through comments or email!

Tagged with 

41 thoughts on “Highest Tax Saving Bank Fixed Deposit Rates U/S 80C – December 2018

  1. Hello sir i have kept rs 150000 as a tax saving fixed deposit for 5years in online banking app of Indus bank that is the maximum amount for a single account.. But after some days i have kept another 150000 rs in another FD of tax saving Both accounts are in the same bank only . Is it OK for tax exemption from both accounts or it is available from single account only..

  2. according to this IDFC is the best bank but sir it has very less branches

  3. Invest for 5 years n show only in current financial yr for tax rebate. Is there long term plan for tax rebate?

  4. Also plz let me knw if I get any proof from the bank online or physical which I can submit as an investment proof in my office!! Thanks in advance.

  5. Hi.. can I take tax saving FD online as I don’t have cheque or cash in hand. I have to submit the proof in my ofc by Jan 15 – 2017!! Please advice..I have icici bank saving a/c!

  6. FD & RD are also part of the tax deduction?

Leave a Reply

Your email address will not be published. Required fields are marked *