Everybody living on salary wants to save tax. He wants to invest his money in a place where he can get good returns and also get the benefit of tax benefit. The nature of the stock market is full of volatility and its valuation is still high. In such a situation, investing in Equity Linked Saving Schemes (ELSS) is risky. In such a situation, 5-year tax savings deposits can give relief to investors. In addition, investors coming to the lower tax slab also prefer fixed deposits. But the return on FD is so low that it is losing its charm.
But there are some banks like Yes Bank and DBS Bank, in which you can get good returns by investing in Tax Savings Deposits (FDs). Yes Bank and DBS Bank are giving the highest interest rates on tax-saving FDs to customers. However, the tax savings FDs have a lock-in period of 5 years and you cannot withdraw money before maturity. But up to Rs 1.50 lakh tax can be taken on this FD under section 80C of the Income Tax Act.
Yes Bank pays the highest interest on tax-saving FD
Among private and public banks, the highest interest rate on tax-saving FDs is Yes Bank and DBS Bank. These two banks are giving 6.75% interest to investors the most. That is if you have deposited Rs 1.5 lakh, then after 5 years you will get Rs 2.10 lakh. After this, IndusInd Bank is paying 6.5%, RBL Bank 6.4%, City Union Bank 6%.
Large private banks are offering 5.5% or less
At the same time, Union Bank is giving the highest interest among the public sector banks. The bank is giving 5.55% interest on tax saving FDs. That is, after 5 years on depositing 1.50 lakh, you will get Rs 1.98 lakh. At the same time, Canara Bank is giving 5.5%, SBI 5.4%, Bank of India 5.3% and PNB 5.3%. At the same time, large private banks of the country like HDFC and ICICI are offering 5.5% or less.