Highest Interest Rate on Tax Saving FD: Tax saving fixed deposits (FDs) are one of the most preferred investment options among senior citizens in India. Tax saving FDs are schemes that give people the benefit of tax exemption of up to Rs 1.5 lakh under Section 80C of Income Tax. These FDs come with a lock-in period of 5 years. These days many small finance banks are offering good interest on tax saving FDs. If you are attracted by all the features and want to invest money in tax-free investment schemes, then you can check the list of banks offering better returns on tax saving FDs here.
Where is the highest interest available on tax saving FD
People who do not take any risk on their hard-earned money and are in the lower tax bracket can opt for tax saving FDs. Tax saving FDs have a lock-in period of 5 years and premature withdrawal is not allowed.
Here is a list of several banks where common people and senior citizens are getting the highest returns on tax saving FDs.
| Name of the Bank | Interest on Tax Saving FD (%) | Tax Saving FD Rate (%) |
| Small Finance Bank | ||
| AU Small Finance Bank | 7.25 | 7.75 |
| Equitas Small Finance Bank | 7.25 | 7.75 |
| ESAF Small Finance Bank | 6.25 | 6.75 |
| Jana Small Finance Bank | 7.25 | 7.75 |
| Northeast Small Finance Bank | 6.25 | 6.75 |
| Suryoday Small Finance Bank | 8.25 | 8.75 |
| Ujjivan Small Finance Bank | 7.20 | 7.70 |
| Unity Small Finance Bank | 8.15 | 8.65 |
| Utkarsh Small Finance Bank | 7.75 | 8.35 |
| Private Sector Banks | ||
| Axis Bank | 7.0 | 7.75 |
| Bandhan Bank | 5.85 | 6.60 |
| City Union Bank | 6.25 | 6.50 |
| CSB Bank | 5.75 | 6.25 |
| indian bank | 6.50 | 7.00 |
| DCB Bank | 7.40 | 7.90 |
| Federal Bank | 6.60 | 7.25 |
| HDFC Bank | 7.0 | 7.50 |
| ICICI Bank | 7.0 | 7.50 |
| IDFC First Bank | 6.75 | 7.25 |
| IndusInd Bank | 7.25 | 7.75 |
| Jammu & Kashmir Bank | 6.50 | 7.00 |
| Karur Vysya Bank | 7.0 | 7.40 |
| Karnataka Bank | 6.50 | 7.00 |
| Kotak Mahindra Bank | 6.20 | 6.70 |
| RBL Bank | 7.10 | 7.60 |
| SBI Bank | 7.75 | 8.25 |
| South Indian Bank | 6.0 | 6.50 |
| Tamilnad Mercantile Bank | 6.50 | 7.00 |
| Yes Bank | 7.25 | 8.00 |
| Public Sector Banks | ||
| Bank Of Baroda | 6.50 | 7.15 |
| Bank of India | 6.0 | 6.75 |
| Maharashtra Bank | 6.50 | 7.00 |
| Canara Bank | 6.70 | 7.20 |
| Central Bank Of India | 6.50 | 7.00 |
| Indian Bank | 6.25 | 6.75 |
| Indian Overseas Bank | 6.50 | 7.00 |
| Punjab National Bank | 6.50 | 7.00 |
| Punjab & Sind Bank | 6.0 | 6.50 |
| State Bank Of India | 6.50 | 7.50 |
| Union Bank Of India | 6.50 | 7.00 |
| Source: Paisabazaar.com | ||
| Interest rates as of 17 September 2024 | ||
(Note:This list of banks has been prepared by Paisa Bazaar.com. Paisa Bazaar has included the updated FD rates till September 17 from the official website of the respective banks in this list. Let us tell you that banks and financial institutions keep changing their interest rates from time to time. In such a situation, investors are advised to confirm from the official website or nearest branch of the concerned bank before investing money in any FD scheme.,
Banks usually offer 0.5% more return on FD to senior citizens than to common people. On the other hand, small finance banks offer higher interest on FD schemes to people than private sector and government banks in the country. Before investing money in the FD scheme of any bank, you can earn good income by evaluating the interest rates of different banks and taking a decision.
Talking about tax saving FD rates, according to the above list, Sarvodaya Small Finance Bank is giving 8.25 percent interest on FD to its general customers and 8.75 percent interest to senior citizens. At the same time, in the private sector bank SBM Bank India, common people are getting 7.75 percent annual interest on tax saving FD. The bank is offering 8.25 percent annual return on 5-year FD to its senior citizens.
If we look at the government banks in the list, currently State Bank of India is offering the highest return on tax saving FD. The bank is offering 7.50 percent annual interest only to its senior citizens. Canara Bank is on top in terms of giving the highest return on 5-year FD to common people.
Why invest in FD?
Bank FD is a safe option for investment. In this, the money of the investors remains safe and they also get better returns on the deposits. The special thing is that along with guaranteed returns on bank FDs, insurance cover of up to Rs 5 lakh is provided by the government institution DICGC. If an investor wants to save tax along with security and guaranteed returns, then tax saving FD can be a better option for him.
