If you want to get a tax benefit, you can open a Tax Saving Fixed Deposit (FD). The State Bank of India (SBI) offers the SBI Tax Saving Scheme that offers a tax benefit for up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. This is a type of FD that comes with a lock-in period of 5 years and comes with a range of other benefits. Fixed Deposits are one among the most popular investments used for saving tax as it offers security and a competitive rate of return on investment. It is very easy to open an SBI tax saving scheme FD online if you are an existing SBI customer. All you have to do is log in to your internet banking account and follow the given set of instructions. This is also a good investment option for senior citizens because the rate of interest is higher.
Interest rates on SBI tax saving FD
An interest rate of 6% is paid on SBI tax saving FDs for all individuals. Senior citizens, on the other hand, will be paid interest at the rate of 6.5%. These interest rates are applicable to all deposits that are less than Rs.1 crore.
| Tenure | Interest rate for individuals | Interest rate for senior citizens |
|---|---|---|
| 5 to 10 years | 6% | 6.5% |
*Interest rates are subject to change at the discretion of the bank
Features and benefits of SBI tax saving FD
Summary of SBI Tax Saving Scheme FD features:
| S.no. | Criteria | Feature |
|---|---|---|
| 1. | Minimum deposit | Rs.1,000 |
| 2. | Maximum deposit | Rs.1.5 lakh |
| 3. | Tenure | 5 years to 10 years |
| 4. | Premature withdrawal | Not allowed |
| 5. | Loan facility | Not available |
Here are the features of SBI tax saving FD
- A tax benefit of up to Rs.1.5 lakh can be claimed on this type of FD. This means that a deduction of this amount will be made from your gross total income to arrive at the total taxable income.
- Tax saving FDs can be opened by Indian residents and members of a HUF
- It is mandatory to furnish PAN card details while opening the FD account along with other relevant documents
- All tax saving FDs come with a certain lock-in period. In this case, the minimum tenure for the SBI tax saving FD is 5 years, while the maximum is 10 years
- Please note that Tax Deducted at Source (TDS) is applicable to all FDs at the rate of 10% if the interest that is earned on a deposit is more than Rs.10,000 in a particular financial year
- There can be no premature withdrawal made in this type of FD until the completion of the deposit tenure
How to open an SBI tax saving FD online
- Step 1: Log in to SBI online banking using your username and password
- Step 2: Go to the home page, navigate to the top menu and click on ‘e-fixed deposit’
- Step 3: Now proceed to click on the ‘e-TDR/e-STDR under Income Tax Saving Scheme’ option and hit the ‘proceed’ button
- Step 4: Choose the account from which the amount should be debited, type in the FD amount and if you are a senior citizen click on the ‘Senior Citizen’ option
- Step 5: Proceed to choose if you want a cumulative (STDR) or a non-cumulative (TDR) FD, choose tenure, give maturity instruction, accept terms and conditions, and click on ‘Submit’
- Step 6: A confirmation message will be displayed on the screen
SBI tax saving FD interest calculator
It is very easy to calculate the interest that will be earned on an SBI tax saving FD. All you have to do is to use the FD interest calculator to find out the maturity amount that you will get on your investment. This tool can be very useful to help you decide how much you need to invest and learn how much you will actually earn. The following are the details required to calculate the interest you will earn on an SBI tax saving FD:
- Interest rate
- Principal amount invested
- Tenure of investment
- Type of interest compounding frequency
Key Information before Opening an SBI Tax Saving FD Scheme
| Eligibility to Open an FD |
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| Documents Required |
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| Benefits of an SBI tax saving FD |
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FAQs
- Is it required to have an active internet banking account to open an SBI tax saving FD online? Yes.
- Are tax saving FDs exempt from tax? The principal amount is exempt from tax but the interest earned on the FD will be subject to tax if the interest gained is more than Rs.10,000 in a financial year.
- What is the cut off time for opening a tax saver FD online in SBI? It is recommended that you open the FD between 8.00 a.m. and 8.00 p.m. In case the FD is opened outside these hours, the request will be processed during the next working day.
- Is it possible to make a nomination online? Unfortunately, this cannot be done online. You will have to visit the branch physically to add a new nominee.
- Is it possible to open an online deposit in the name of another person? This is not possible. In case, you want to do the same, please make a visit to the nearest branch.
- Is it possible to close the term deposit account online? This will not be possible in case of tax savings schemes because they come with a certain predetermined lockin period.
- Can I choose a tenure of 10 years for this type of deposit? Yes. You can choose a tenure that ranges anywhere from 5 years to 10 years.
- Is it possible to open joint FDs?Yes, this can be done without any hassle.
