Tax-saving deposits are popular among risk-averse investors who wish to decrease their tax burden while simultaneously earning a reasonable return. Most tax-saving deposits have a 5-year lock-in term and offer a tax deduction of up to Rs 1.5 lakh per year under Section 80C of the Income Tax Act.
Fixed deposits that pay monthly or quarterly interest distributions give rewards based on the investor’s age; older folks receive significantly higher returns than other age groups.
Because the risk profile of the average tax-saving FD investor is generally mild, identify the top five public banks that give the best yields on tax-saving deposits.
Indian Union Bank
The state lender changed the interest rate on fixed deposits in November. It currently provides a 6.7% interest rate on tax-saving FDs with a 5-year lock-in term, and senior investors receive an extra 50 basis points. As a result, the interest rate offered to older persons on a 5-year tax-saving Union Bank of India FD is 7.2%.
The Canara Bank
Canara Bank is another public sector bank that provides significant yields on tax-saving FDs. The bank’s interest rates were last changed on October 31, 2022. The current 5-year Canara Bank tax-saver FD interest rate is 6.50% for the general public and 7% for elderly persons.
“Canara Tax Saver Deposit Scheme: Bank Offers 6.50% p.a” (General Public). “The maximum deposit permissible is 1.50 lakh,” Canara Bank says on its website.
Overseas Indian Bank
Indian Overseas Bank offers the third highest interest rate on tax-free fixed deposits. The higher interest rates will go into effect on November 11, 2022. IOB Tax Saver term interest rates are 6.40% for the general public, 6.90% for senior people, and 7.15% for super senior citizens.