Savings Fixed deposits in India
Below is a MRR and PLR article in category Finance -> subcategory Loans.
Understanding Savings and Fixed Deposits in India
Overview
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Importance of Tax Saving
Tax saving is crucial as individuals can pay up to 40% of their income in taxes. Many banks offer tax-saving fixed deposit schemes that not only provide competitive interest rates but also help you save on taxes. These fixed deposits, unlike just Public Provident Funds or National Savings Certificates, qualify for deductions under Section 80C.
Tax-Saving Fixed Deposits
Banks’ tax-saving fixed deposits come with a 5-year lock-in period, offering returns between 7.50% and 8.50% annually. You can invest amounts ranging from a minimum of Rs 100 to a maximum of Rs 100,000 per annum. These deposits are ideal for risk-averse investors aiming to diversify their tax-saving strategies.
Benefits of Fixed Deposits
A fixed deposit account allows you to park your money for a specified period, ensuring higher interest rates compared to regular savings accounts. IDBI, for instance, has introduced a five-year IDBI Suvidha Tax Saving Fixed Deposit, effective from August 4, with an interest rate of 8.5%. Senior citizens can avail an even higher rate of 9%. In this scheme, an Undivided Family can invest up to Rs 1 lakh, resulting in pre-tax returns of over 12%.
Conclusion
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Explore more:
- [Fixed Deposits](http://www.ecompare.co.in/)
- [Fixed Deposit Interest Rates](http://www.ecompare.co.in/savings/savings-india.cfm?type=fixeddeposits)
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