Do you know about Tax saving fixed deposits?

Tax saving fixed deposit –

People opt for fixed deposits as an investment option. The feature of a fixed deposit is a savings scheme that offers higher returns than a savings account. The returns on an FD are assured, and it is not impacted by market fluctuations, making a fixed deposit the popular investment option. A Tax-Saving Fixed Deposit is a scheme through which you get tax deductions under Section 80C of the Income Tax Act, 1961. The lock-in period for a tax-saving FD is 5 years. A tax-saving fixed deposit can help you save taxes and give you assured returns upon the maturity of your FD.

Benefits of Tax-Saving Fixed Deposit –

  1. Benefit of tax – You can claim a tax deduction against your deposit through this. You can claim deductions up to Rs. 1.5 lakh per annum, according to Section 80C of the Income Tax Act, 1961.
  2. Assured Returns -The returns on a tax-saving FD are assured upon maturity of the deposit. You can earn a safe and stable income at an attractive interest rate with the risk of market fluctuations.
  1. Nomination Facility – A nominee is a person that can be assigned to take care of your investment in case of any unfortunate event. The choice of a nominee is up to the investor. While opening a fixed deposit account, the bank will ask you for the details of the selected nominee.
  1. Deposit amount – The minimum deposit amount depends on your chosen bank. Some financial institutions offer a minimum deposit as low as Rs. 1000. This makes it easier for people to invest in a tax-saving FD without worrying about putting away a large sum they might need later.
  2. Senior Citizen Benefits – Most banks offer bonus interest exclusively for senior citizens. This raises the interest rate, allowing senior citizens to earn more from their fixed deposits. This increased interest rate applies to tax-saving fixed deposits as well. This way, senior citizens can save on taxes and earn more income through fixed deposits.

Conclusion –

A Tax-Saver Fixed Deposit can be very beneficial to achieving your financial goals. Senior citizens can make the most of this opportunity if the financial institution offers additional interest for the elderly. Opening an FD also serves as a healthy way to start saving money for a brighter future.

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