Latest Tax Saving Fixed Deposit (FD) Interest Rates 2018

By | February 13, 2017

Tax saver bank FDs are best income tax saving instrument. One can do a last minute fixed deposit scheme and save up to Rs 1.5 lakh max under section 80C of the Indian Income Tax Act, 1961. One have to go for a minimum locking period of 5 years duration to get income tax benefit. But recently these 5 year fixed deposit tax free schemes has lost their plot due to the fall of interest rates. You can easily use any tax saver fd calculator online and find out how much money you will get with the current interest rates compared to other schemes like mutual fund investment.

Highest Tax Saving Bank Fixed Deposit Rates To Get Maximum 80C Benefits

As an Investor, you can open a Bank FD to save tax as  “Single holder Type Deposits” and “Joint holder Type Deposits”. Remember one thing, the return from such tax saver FD is also taxable and also attracted to pay TDS. In case you belong to 30% slab income tax, then it is a good idea to invest in tax saver FD schemes. You should also know the tax saver fd premature withdrawal rules before investing.

Top 5 Tax Saving Fixed Deposit Schemes for 2017

Considering an investment of Rs 10,000 for selected tenure in Bank Fixed deposit. You will find out how much the return will be after the time mentioned in the last column. Remember the duration of investment here is 5 years.

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Bank NameInterest RateFinal Return
DCB Bank7.9014,787
Lakshmi Vilas Bank7.8014,714
City Union Bank7.7514,678
ICICI Bank7.7514,678
Karur Vysya Bank7.7514,678


Note: This data is collected from The Economic Times Wealth Magazine. Please visit the bank website first to check the current Tax Saver bank FD interest rates in 2017 and then only invest in fixed deposit schemes.


Bank of Baroda, Allahabad Bank, State Bank of Saurashtra, Central Bank of India, State Bank of Patiala, Andhra Bank, Canara Bank, State Bank of Hyderabad, Oriental Bank of Commerce, Dena Bank, State Bank of Mysore, State Bank of Indore, UCO Bank, Vijaya Bank, Syndicate Bank, State Bank of India, Bank of India, Corporation Bank, Indian Bank, Union Bank of India, Punjab National Bank, State Bank of Bikaner and Jaipur, State Bank of Travancore.


Bank of Rajasthan, Catholic Syrian Bank, Bank of Punjab, Dhanlakshmi Bank, HDFC Bank, Karur Vysya Bank, ING Vysya Bank, Laxmi Vilas Bank, Karnataka Bank, South Indian Bank, United Western Bank, UTI Bank, Centurion Bank, City Union Bank, Development Credit Bank, Federal Bank, ICICI Bank, IndusInd Bank, Jammu & Kashmir Bank

Should You Invest in Tax Saver Fixed Deposit Schemes or You Should Look for FD Alternatives?

Generally people mostly like to invest in tax saver FD schemes due to the flexibility with their savings bank account and also for a guaranteed return from investment. Besides that the income tax exemption is the key. But now a days the return from such FD schemes are not at all good. And there are various TDS rules & maturity is also not tax free.

In such a case if you opt for ELSS Mutual funds to save taxes under section 80C. You will also get good return on investment with zero tax on maturity. E.g. I have invested Axis LT Equity Mutual Fund recently and the 1 year return on investment is more than 14%. But if you are not confident or don’t want to take risk by investing in stock market related products, then FDs are best schemes to save income tax. What do you think on this topic? Just write a comment below.

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