2 tax saving fixed deposits promising over 8% returns to senior citizens

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Elderly individuals should take note of the fact that investing in a safe investment strategy like a fixed deposit scheme is highly recommended for tax savings since it not only delivers fixed returns but also guarantees that your investments are secure to 5 lakh by DICGC. So for them, here are the two DICGC-insured banks that are promising over 8% returns on tax-saving fixed deposits of 5 years.

Utkarsh Small Finance Bank

On August 12, 2022, Utkarsh Small Finance Bank last modified the interest rates on its fixed deposits. The bank is now giving an interest rate of 7.50% for the general public and 8.25% for senior citizens on tax-saving fixed deposits of 5 years. Utkarsh Small Finance Bank is the only bank in the banking sector delivering the highest interest rate on tax-saving fixed deposits, which is 8.25% when the interest rate for senior citizens is taken into account.

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Utkarsh Small Finance Bank FD Rates (utkarsh.bank)

Jana Small Finance Bank

The last time Jana Small Finance Bank increased the interest rates on fixed deposits under 2 Cr was on June 15th, 2022. Following the change, the bank is now providing an interest rate of 7.25% for the general public and 8.05% for senior citizens on tax-saving fixed deposits maturing in 5 Years[1825 Days]. Jana Small Finance Bank is the second bank on our list delivering the highest interest rate on tax-saving deposits when the senior citizen interest rate is taken into account. You can get a tax deduction of up to 1,50,000 by investing in Jana Bank’s Tax Saver Fixed Deposit under Section 80C of the Income Tax Act, 1961.

Jana Small Finance Bank FD

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Jana Small Finance Bank FD (janabank.com)

But before investing in tax-saving fixed deposits investors should keep in mind that tax saver FDs come with a lock-in period of 5 years and hence premature withdrawals, partial withdrawal and loan & overdraft facility against deposits are not permitted, investments up to 1.5 lakh in a financial year allows you to claim tax deductions under section 80C, only individuals and HUFs are eligible to invest in tax-saving fixed deposit(FD) schemes.

Investors can establish a tax-saving fixed deposit account either individually or jointly, however, in the instance of a joint account, the tax benefits will only be available to the first or primary account holder. The interest received is taxable depending on the investor’s tax bracket, hence TDS would be deducted. Elderly individuals may consider investing in tax-saving fixed deposits in light of the current increasing interest rate milieu in order to not only receive higher returns but also lessen their tax liability.

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