Section 80C of the IT act, investments up to Rs 1.5 lakh may be claimed for deduction section 80C of the IT act, investments up to Rs 1.5 lakh may be claimed for deduction.
The most favored investment option in India has been a fixed deposit (FD). Investors of all age ranges appreciate to invest their savings in this area, as FDs are secure, and returns are guaranteed.
Many cautious investors choose tax-saving FDs to take advantage of the section 80C deduction. Under this section investments up to Rs, 1.5 lakh can be stated for the deduction. FDs have a lock period, which means you cannot withdraw at that period, and early withdrawals are not permitted.
List of Banks Providing high-interest on Fixed Deposits
|Bank||Annual rate of interest||What Rs 1.5 lakh grows to in 5 years to|
|AU Small Finance Bank||7.00%||212,217|
|IDFC First Bank||6.75%||209,625|
|Ujjivan Small Finance Bank||6.25%||204,531|
|Karur Vysya Bank||6.00%||202,028|
Data as on respective banks’ websites on July 29, 2020. The interest rate of all listed (BSE) public & private banks and foreign banks considered for data compilation. Banks for which verifiable data is not available are not considered. The table includes only tax-saving FDs (for non-senior citizens) for a 5-Year tenure. For all FDs, quarterly compounding is assumed. Source: BankBazaar.com
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Up to 10 private banks sell FDs with interest rates of 6% or more. According to figures provided by BankBazaar, AU Small Finance Bank topped the list with 7% interest, accompanied by private banks like DCB Bank, IDFC First Bank, IndusInd Bank, Yes Bank, and RBL Bank.
Investors could even park any surplus funds in such FDs after assigning some savings as well as other tax-saving options.
Axis Bank, ICICI Bank provides 5.5% and HDFC Bank gives 5.35% of fixed deposits over a 5-year period. The State Bank of India ( SBI) and the Bank of Baroda (BOB) both pay 5.40% and 5.30%.
After 5 years a total of Rs 1.5 lakh deposited in the FD of AU Small Finance Bank the final amount increases to Rs 2.12 lakh.