Senior Citizens Tax Saver FD Scheme: Banks have cut interest rates on Fixed Deposits a lot, due to which Senior Citizens have suffered the most. When the loan was cheap, banks reduce the interest rate on deposits, the same has happened with the interest rate of fixed deposits. Because RBI has kept the repo rate at 4 percent. However, in view of rising inflation, there is hope for an increase in interest rates in the coming days.
Tax-Saving FDs for Senior Citizens
Tax is payable on the returns received on fixed deposits. The investor has to pay tax according to the tax slab he falls in. In such a situation, senior citizens can invest in fixed deposits with tax saving option. In this, they will also get better return on investment as well as tax benefits.
Higher interest on Tax-Saving FDs
Investments in tax saver fixed deposits have a lock-in period of five years. Hence no investor can break fixed deposit before 5 years. Tax deduction is available on investment of Rs 1.5 lakh in a year under Section 80C rule of Income Tax on investment in Tax Saver Fixed Deposit. Most importantly, senior citizens get 0.50 percent more interest annually on tax-saver fixed deposits.
Additional discount for senior citizens
Any individual can open a single or a joint fixed deposit account but the tax exemption can be availed only by the primary account holder. According to the tax slab in which the investor falls, he has to pay TDS on the fixed deposit amount. But senior citizens can get exemption by giving Form 15H and non-senior citizens Form 15G to the bank. Senior citizens can avail additional tax exemption on interest income up to Rs 50,000 on fixed deposits under the 80TTB Act of Income Tax.
Return on Tax Saver FDs of Veteran Banks
Senior citizens who want to make tax saving fixed deposits can consider the fixed deposit schemes of these government, private and small finance banks. Along with this, the table is also mentioned about how much amount they will get as an estimate after 5 years.
Bank Interest Rate (Annual) Returns After 5 Years
SBI 6.20 2,04,028
Union Bank 5.90 2,01,035
PSB 5.80 2,00,047
Axis Bank 6.50 2,07,063
Federal Bank 6.25 2,04,531
HDFC Bank 5.80 2,00,047
Yes Bank 7.00 2,12,217
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