Up to 7.9% interest rate on senior citizen tax saving FDs: Which banks are offering best rate?

Fixed deposits (FDs) are still one of the most popular fixed-income investment alternatives for risk-averse investors, particularly seniors. Furthermore, recent high interest rates have made fixed deposits even more appealing to conventional investors.

Individuals can claim income tax deductions of up to Rs 1.5 lakh under Section 80C of the Income-tax Act of 1961 when they make tax-saving fixed deposits.

All About Tax-Saving

Is TDS applicable to senior citizen tax saving FD?

TDS (Tax Deducted at Source) applies to all interest income produced in India, including FDs. Seniors should keep in mind that the interest generated on these fixed deposits is not tax-free. It is taxed according to the investor's tax bracket. Senior persons, on the other hand, have the option of deducting up to Rs 50,000 from the total interest received on fixed deposits within a fiscal year under section 80TTB of the Income-tax Act. If the amount of interest credited in a fiscal year exceeds Rs 50,000, banks would impose tax deducted at source (TDS) on such revenue. TDS is currently reduced to 10% under Section 194A of the Income-tax Act.

Top banks offering best rates on tax-saving FDs

How to open an SBI tax saving FD online

Step 1: Log in to SBI online banking using your credentials
Step 2: Click on 'e-fixed deposit'
Step 3: Click on the 'e-TDR/e-STDR under Income Tax Saving Scheme' option
Step 4: Click on the 'proceed' button.
Step 5: Select the account to be debited, enter the FD amount, and, if you are a senior citizen, select the 'Senior Citizen' option.
Step 5: Select whether you want a cumulative (STDR) or non-cumulative (TDR) FD. Choose your tenure, provide maturity instructions, accept the terms and conditions, and click the 'Submit' button.
A confirmation message will be displayed on screen

Terms And Conditions of SBI

• No term deposit shall be cashed before the expiration of the five-year lock-in period from the date of receipt.
• Premature closure will be permitted after 5 years, subject to the terms and circumstances of the Term Deposit.
• In the event of the account holder's death, the nominee/legal heirs have the right to withdraw the deposit at any point before or after maturity.

In the event that the first account holder in a joint account dies, the other account holder has the right to withdraw the deposit before it matures. The bank shall pay interest at the relevant rate for the duration of deposit without penalty.

Private banks Senior citizens tax-saving FD interest rates compared

Bank	5-year tax FD interest rate (%)
Kotak Mahindra Bank Ltd	6.7
HDFC Bank Ltd	7.5
DCB Bank Ltd.	7.9
Axis Bank Ltd.	7.75
YES Bank Ltd.	7.75
ICICI Bank Ltd.	7.5
RBL Bank Ltd.	7.5

Public sector banks Senior citizens tax-saving FD interest rates compared

Bank	5-year tax FD interest rate (%)
Bank of Baroda	7.15
Canara Bank	7
Punjab National Bank	7
State Bank of India	7.5
Punjab & Sind Bank	6.75