SBI Tax Saving Fixed Deposit

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SBI Tax Saving Fixed Deposit

It's a big choice to invest your hard-earned money for a worry-free, secure future. There are several strategies to invest and save money so that, in due course, you might get a sizable return. One of the greatest and most often used investing strategies for achieving high returns is fixed deposits. Numerous financial organizations, including banks, provide competitive interest rates on fixed deposits. One kind of fixed deposit that aids in Section 80C tax exemptions is the tax-saving FD.

What is the SBI Tax Saving FD?

A tax saving FD is a kind of fixed deposit that allows a person to file for a tax deduction under Section 80C of the Indian Income Tax Act of 1961. These deposits are capable of being made in two ways: single-holder type deposits and joint-holder type deposits.

The "SBI Tax Saving Scheme" incorporates the security and dependability of regular FDs with the added benefit of tax advantages. Investors can earn excellent interest on deposits while also benefiting from exclusions under Section 80C of the Income Tax Act.

The SBI saving tax FD is an appealing balance of savings and tax optimization for consumers looking for effective ways to lower their tax liability while assuring that their money grows. 

Features of SBI Tax Saving FD

The distinct features of the SBI Tax Saving FD are as follows:

  1. Under section 80C of the Income-tax Act of 1961, the investor is entitled to a tax-saver foreign direct investment exemption of ₹1,50,000.
  2. Senior citizens (those over 60) are eligible for a tax deduction of up to ₹50,000, whilst non-senior citizens are only eligible for ₹40,000.
  3. There is a five-year minimum and a ten-year maximum term for the SBI tax-saving FD.
  4. In the event that the PAN has not been provided, 20% TDS is computed.
  5. If your income is less than ₹2.5 lakhs, i.e., is less than the taxable limitation, you may avoid TDS by filing Form 15G to the financial institution.
  6. If the overall earnings are less than the taxable limitation, you may avoid TDS by sending Form 15H to your bank. 
  7. The tax benefit can only be accessible to the primary holder if you choose the joint holding method. 
  8. There is no provision for early release in this kind of FD till the deposit term is completed.
  9. Residents of India and HUF members are eligible to open tax saving FDs.
  10. The SBI tax saving FD has a minimum term of five years and a maximum term of ten years.
  11. In the unfortunate circumstance of the account holder's death, the money deposited can be withdrawn by the nominee/legal heirs at any moment before or after maturity. If a joint account holder passes away, the surviving account holder has the privilege to make a withdrawal of the deposit before it matures. The bank will be paying interest at the present rate on the money deposited for the entire term of the deposit without any penalty.

Documents Needed for SBI Tax Saving FD

The given documents are required to apply for SBI tax saving FD:

  • SBI tax saving FD application form
  • Government-preferred ID proof:
    • Adhaar card
    • Passport
    • Driving licence
    • Voter ID card
    • Ration card
    • PAN card
    • Senior citizen ID card 
  • Address proof
    • Electricity bill
    • Telephone bill
    • Voter ID card
    • ID card/certificate issued by post office
    • Passport
    • Bank statement
  • Form 60 or 61
  • 2 passport-size photographs of the applicant

Eligibility for SBI Tax Saving FD

The eligibility to apply for this FD is not very complicated. The following individuals can apply for the SBI tax saving FD:

  • Indian residents
  • Karta of Hindu Undivided Families (HUF)
  • Existing customers of SBI  

How to Apply for a SBI Tax Saving FD

The following are the steps to apply for the SBI tax saving FD:

  1. Log in to your SBI internet-based banking account, entering your login credentials. 
  2. Go to the main page, pick the top menu, and then choose 'e-fixed deposit.' Then, choose 'e-TDR/e-STDR under Income Tax Saving Plan' and click the 'Continue' option. 
  3. Click the bank account from which the necessary amount needs to be debited, input the FD amount, and, if the applicant is a senior citizen, choose the 'Senior Citizen' option.
  4. Click on the "Submit" button after selecting the tenure, maturity rules, and whether you would like a cumulative (STDR) or non-cumulative (TDR) FD. You also have to agree to the terms and conditions. 
  5. A confirmation message will be displayed on the screen.

Benefits of SBI Tax Saving FD

The benefits of having an SBI tax saving FD are given below: 

  1. The compounded interest earned over the term of the fixed deposit enhances the growth of the money you have invested.
  2. Investing in fixed deposits tends to be safe because there are only a few risks associated.
  3. A tax saver FD, unlike mutual funds, does not have market-linked returns. They have a fixed interest rate and assured returns during the term. So, using an online FD calculator, you can quickly determine how much tax-free FD corpus you will have at maturity.
  4. Senior citizens should expect tax-saving fixed deposit investments to yield returns of between 0.25% and 0.5% more than those of regular customers, similar to other FDs.
  5. Tax-saving FD schemes are eligible for a deduction of up to ₹1.5 lakh according to Section 80C of the Income Tax Act.
  6. The lowest deposit amount begins at ₹1000.

How to Calculate the SBI Savings Tax FD Interest Rate?

Estimating SBI FD interest rates in advance allows you to compare interest rates and earnings in the future easily. You have the option of using any online FD calculator or application that helps you calculate maturity amounts easily and swiftly. 

Conclusion

The SBI savings tax FD is similar to the general fixed deposits. The SBI Tax Saving Scheme is created exclusively for those who want to save money on taxes. It provides tax advantages under Section 80C of the Income Tax Act. The scheme has a five-year lock-in term during which the invested funds cannot be withdrawn. The main benefit is that there is no market correlation with a Tax Saving FD. You can easily apply for this FD scheme either online or by visiting the nearest bank branch.

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