Income tax saving FDs: Top 5 tax-saving bank FD interest rates – Tax-saving FDs

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Income tax saving FDs: Top 5 tax-saving bank FD interest rates – Tax-saving FDs | The Economic Times

tax saving fds
The section 80C basket of financial instruments, as outlined in the Income Tax Act, includes bank FDs. Since they are thought to be less risky than equities, many people utilise this investment choice to reduce their taxable income.

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Top 5 tax-saving FDs
Here is a look at 5 banks offering the highest interest rates on tax-saving FDs. (Interest rates are as on November 3, 2022; Source: Compiled by ETIG)

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DCB Bank
DCB Bank offers an interest rate of 7.25% on a 5-year tax savings fixed deposit.

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City Union Bank
City Union Bank offers an interest rate of 7% on 5-year tax savings fixed deposits.

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AU Small Finance Bank
AU Small Finance Bank offers an interest rate of 6.95% on 5-year tax savings fixed deposits.

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Indusind Bank
Indusind Bank offers an interest rate of 6.75% on 5-year tax savings fixed deposits.

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Yes Bank
Yes Bank offers an interest rate of 6.75% on 5-year tax savings fixed deposits.

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Taxation
Under section 80C of the Income Tax Act, investments up to Rs 1.5 lakh can qualify for a deduction in a given fiscal year. But one must keep in mind that interest accrued/paid on the principal is entirely taxable in your hands. Interest will be applied to your income and taxed at the rates of your income tax bracket.

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