What is Tax Saving Fixed Deposit

Fixed deposit is a type of deposit where an investment is made for a specific time period. Tax-saving fixed deposit is one where investment amount can get deduction under Section 80C of the Indian Income Tax Act. These deposits can be individual as well as joint. The tenure of these deposits is generally five years. A maximum deduction of Rs 1.5 lakh can be claimed by someone who invested in a tax saving fixed deposit FDs can be termed as financial tools that offer higher rate of interest than saving accounts. They are considered to be one of the most secure investment and tax saving options available. Almost all banks offer fixed deposits, so before investing, it is important to weigh the pros and cons.

• Availability - All public and private sector banks offer fixed deposits in India. Now, the same can be done via internet banking.
• Assured returns: The interest offered by FD is greater than savings account. Longer the term of FD, greater the returns. All banks have varying interest rates.
• No limit on opening FDs: Any number of FDs can be opened at a particular bank or in different banks. The exemption limit of interest on FDs is 1.5 lakh; until the amount reaches there it is free from any taxes.

• The depositor should be a citizen of India, or
• Member of individuals, HUF (Hindu Undivided family) or senior citizens