The most popular investment option for tax savers is the Tax Saver Fixed Deposit, which allows investors to claim annual tax deductions 1.5 lakh under section 80C of the Income Tax Act of 1961. However, if the deposit is held with a lock-in period of 5 years, the tax benefit is also applicable. As the name suggests, Tax Saving Fixed Deposit cannot be prematurely withdrawn. Tax-saving fixed deposits opened jointly can have tax benefits, but only the first holder is eligible to take advantage of the deduction. Interest earned on these deposits is taxed as per your tax bracket, so bank will deduct TDS if it exceeds 40,000 for regular customers and 50,000 for senior citizens in a given financial year. TDS can also be avoided by submitting Form 15G or 15H to the bank. Interest rates on fixed deposits have been rising ever since the Reserve Bank of India (RBI) raised the repo rate by 90 basis points to 4.9 per cent in June, however, inflation remains a concern. Retail or CPI inflation in India eased slightly to 7.01 per cent in June from 7.04 per cent in the previous month, and to beat inflation, tax savers can look to lower DICGC-insured small finance banks that are inflation-beating on tax. Offering returns- saving fixed deposits not only to senior citizens but also to non-senior citizens.
Ujjivan Small Finance Bank
Ujjivan Small Finance Bank last changed its interest rates on 13 June 2022. With an additional rate of 0.50 per cent for senior citizens, the bank is now offering an interest rate of 2.90 per cent to 6.00 per cent to the general public after the revision. The bank is now offering an interest rate of 7.20 per cent to the general public and 7.70 per cent to senior citizens on tax saving fixed deposits of 5 years or 60 months.
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Jana Small Finance Bank
Tax saver fixed deposits from Jan Bank are eligible for tax deduction up to Rs 1,50,000 under section 80C of the Income Tax Act of 1961. A tax-saving deposit can be made with a minimum deposit 100 and maximum deposit 1,50,000 in a financial year. As the name suggests, tax saving FDs can be issued for a lock-in period of 5 years (1825 days), and the bank will not allow early withdrawal, loan/overdraft against fixed deposits or auto-renewal . Jana Small Finance Bank is now offering an interest rate of 7.25% for general public and 8.05% for senior citizens on Tax Saving FDs.
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Fincare Small Finance Bank
Investors with Fincare Small Finance Bank have the option of paying monthly, quarterly or cumulative interest on their tax-saving fixed deposits. In order to avail tax benefits, the minimum investment should be 5000 and maximum contribution 1.5 lakh annually for a lock-in period of 5 years. In addition, the bank offers door-to-door services to the old residents and the benefit of an additional interest rate of 0.50 percent. Fincare Small Finance Bank is now offering an interest rate of 7 per cent for non-senior citizens and 7.50 per cent for older adults on tax saving fixed deposits of 5 years or 60 months.
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