Investment
oi-Vipul Das
The most common strategy for long-term bond investors who want to save Section 80C tax while earning safe returns on their deposits is to invest in fixed-rate term deposits. Depositors can save tax benefits under Section 80C if they invest up to Rs 1.5 lakh for a deposit term of five years. The most tempting aspect of tax-saving deposits is that after the ELSS, they are the most preferred tax-saving mechanism. However, it should be noted that tax savings deposits have a lock-up period of 5 years, which means that early withdrawals are not permitted. On the risk front, DICGC guarantees principal protection on the principal and interest amount of your tax saving deposits up to Rs 5 lakh. Tax-saving DFs are a good option for individuals who want to build wealth for their retirement age because they offer low risk and assured returns. Based on extensive research, these are the top 5 public, private and small financial banks that offer the best tax-saving interest rates.
Top 5 Public Sector Banks Offering the Best Yields on Tax Savings Deposits
Along with SBI, the top 5 public sector banks now offering the highest interest rates on tax-saving deposits are listed below.
| Banks | Regular interest rate per year | Rates for the elderly per year | Wef |
|---|---|---|---|
| Union Bank of India | 5.40% | 5.90% | 09/01/2021 |
| Bank of Punjab and Sindh | 5.30% | 5.80% | 09/16/2021 |
| SBI | 5.30% | 5.80% | 15.01.2022 |
| Bank of Baroda | 5.25% | 5.75% | 16.11.2020 |
| Canara Bank | 5.25% | 5.75% | 17.01.2022 |
| Source: Bank websites |
Top 5 Private Sector Banks Offering the Best Yields on Tax Savings Deposits
The top five private sector banks that currently offer the highest interest rates on tax-saving deposits are listed below.
| Banks | Regular interest rate per year | Rates for the elderly per year | Wef |
|---|---|---|---|
| Yes Bank | 6.25% | 7.00% | 04.01.2022 |
| RBL Bank | 6.30% | 6.80% | 03.02.2022 |
| First IDFC Bank | 6.25% | 6.75% | 21.01.2022 |
| Bandhan Bank | 6.25% | 7.00% | 12.01.2022 |
| IndusInd Bank | 6.00% | 6.50% | 23.07.2021 |
| Source: Bank websites |
Top 5 Small Financial Banks Offering Highest Returns on Tax Savings Deposits
Below is a list of the top five small financial banks that now offer the best interest rates on tax-saving deposits.
| Banks | Regular interest rate per year | Rates for the elderly per year | Wef |
|---|---|---|---|
| Bank Jana Small Finance | 6.75% | 7.55% | 11.01.2022 |
| Utkarsh Small Finance Bank | 6.75% | 7.25% | 20.01.2022 |
| Fincare Small Corporate Bank | 6.75% | 7.25% | October 25, 2021 |
| Suryoday Small Finance Bank | 6.75% | 7.00% | September 09, 2021 |
| Northeast Small Finance Bank | 6.50% | 7.00% | 27.01.2022 |
| Source: Bank websites |
Article first published: Sunday, February 6, 2022, 11:19 a.m. [IST]
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