Senior Citizens Tax-Saving FDs: In Fixed Deposit, investors get guaranteed returns with low risk, hence it is considered as an evergreen scheme. This method of investment is also very popular among senior citizens. Investors investing in FD get a fixed interest on monthly, quarterly and yearly basis. However, for the last one year, the Reserve Bank (RBI) has kept the repo rate at 4 percent. Most banks have cut FD interest rates in recent times. FD returns are fully taxable as per the income tax slab of the investor, hence the actual rate of return becomes even lower. That’s why many senior citizens are confused whether to depend on FD for regular income.
On the other hand, tax saving FDs are fixed deposits that come with a lock-in period of 5 years. Senior citizens can claim a deduction of up to Rs 1.5 lakh annually for their investments in these tax saving fixed deposits. It is a great investment option for senior citizens as most of the banks give them an additional 0.5% interest. However, do note that according to BankBazaar, premature withdrawal is not allowed due to the lock-in period.
Option to open single or joint account
Senior citizens can open single as well as joint FD accounts for tax saving. But in such a joint account, the tax benefit can be available only to the first account holder i.e. the first account holder.
Generally, TDS is deducted on FD returns as per the tax slab of the investor, but senior citizens can submit Form 15H (Form 15G for non-senior citizen depositors) to the bank to avoid TDS. In addition, senior citizens can avail tax deduction of Rs 50,000 on interest earned on deposits under Section 80TTB of the Income Tax Act, subject to terms and conditions.
So if you are a senior citizen and want to invest in tax-saving FDs, you can check the interest rates offered by some of the leading government, private and small finance banks in the country from the list below. However, before investing anywhere, you should read all the terms and conditions related to it properly.
(Disclaimer- These figures have been taken from the respective banks’ websites as on September 14, 2021. Banks whose data is not readily available on their websites, have not been included. These figures are available on online marketplaces for loans, credit cards, etc. Compiled by BankBazaar.com.)
(Article : Sanjeev Sinha)
Get Business News ,, latest India News ,, and other breaking news on share market, investment scheme and much more on Business Khabar. Like us on Facebook, Follow us on Twitter for latest financial news and share market updates.
.