Earn interest, save tax
Are you eligible?
Minimum and maximum investment amount
Further. you may pick between the cumulative interest or non-cumulative options of tax-saving FDs, offered by most banks. Cumulative option means that interest accrued on your principal will be re-invested and paid to you at the time of maturity whereas in case of the non-cumulative option, interest will be paid to you on monthly/quarterly/half-yearly/annual basis, as offered by the bank.
Tenure of FD
Type of holding
If interest payments on FDs with a single bank exceed Rs 10,000 in a financial year, then TDS will be deducted by the bank. To avoid TDS, one can submit Form 15G or Form 15H, as applicable.
Also keep in mind…
- Nomination facility is also available for these deposits.
- Unlike a regular bank FD, which can be used as collateral against a loan, a tax-saving FD cannot be used as collateral or be pledged to get a loan.