What are tax-saving FDs?

1. It is a fixed deposit which allows tax deduction under Section 80C.

2. This type of FD has a lock-in period of 5 years and can be liquidated only after that.

3. An investor can claim deduction of up to Rs 1.5 lakh per financial year by investing in these FDs.


4. The interest earned on these fixed deposits is taxable as per tax bracket of the investor.

5. Such fixed deposits have guaranteed returns and fall under the low risk category.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)