As per an ET, right here’s how the 5-yr Post Office Time Deposit (POTD) and tax-saving mounted deposits provided by main banks evaluate:
Tax-saving mounted deposits
A tax-saving mounted deposit lets you deposit as much as Rs 1.5 lakh and earns quarterly compound curiosity.Interest is added to your account on the finish of every quarter. Investments in tax-saving FDs qualify for a tax deduction below Section 80C of the Income Tax Act, 1961, as much as Rs. 1.5 lakh. These FDs have a 5-yr tenure and can’t be withdrawn prematurely like common FDs.
Interest rates fluctuate amongst completely different banks. For normal residents, State Bank of India (SBI) affords an rate of interest of 6.50%. HDFC Bank and ICICI Bank present curiosity rates of seven% for tax-saving FDs. DCB Bank affords a 7.75% rate of interest, whereas IndusInd Bank affords 7.25% for tax-saving FDs.
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Post Office Time Deposit (POTD)
Post Office Time Deposit (POTD), with a 5-yr period, additionally affords a tax profit. Under Section 80C of the Income-tax Act of 1961, you can declare a tax deduction of as much as Rs 1.5 lakh for investing in a 5-yr Post Office Time Deposit.
For the interval of April-June 2024, the rate of interest on POTD is 7.5%. The minimal funding required is Rs 1000, with subsequent investments allowed in multiples of Rs 100.
Banks providing finest price on tax saving FD
| Bank Name | Tax Saving |
| DCB Bank | 7.4 |
| Indusind Bank | 7.25 |
| Yes Bank | 7.25 |
| RBL Bank | 7.1 |
| HDFC Bank | 7 |
Tax advantage of Section 80C
Section 80C permits taxpayers to cut back their taxable earnings by investing in sure devices or incurring qualifying bills, thereby saving cash on taxes. This profit is relevant just for taxpayers who select the outdated tax regime. It permits an annual deduction of as much as Rs 1.5 lakh from the taxpayer’s gross earnings. Individuals investing in 5-yr Post Office Time Deposits are eligible for this tax profit. However, it is vital to notice that the tax profit is simply obtainable if the deposit is held till the tip of the tenure, which is 5 years.
