you can save tax and invest that money as a part of future savings

 “Invest as much as you want. Section 80C allows tax savings of ₹1, 50,000 per year!”

There are various ways you can save tax and invest that money as a part of future savin find gs. One of them is the tax saver fixed deposit. It is an investment where y business ou get a tax deduction up to ₹1,50,000 under section 80C included in the Indian Income Tax Act of 1961. These tax savings fixed deposits have higher interest rates as compared to regular FDs or PPFs. The interest goes as high as 5.5%- house 7.75%, depending upon the banks and NBFC. Furthermore, the lock-in period of your money for these FDs is only five years.

Facts about tax-saving fixed deposits

You can invest a minimum of ₹10,000 and a maximum of ₹1,50,000 per year in tax-saving FDs.
These FDs have no auto-renewal or pre-mature withdrawal facilities.
It allows you a one-time lump sum money deposit. No further deposits are allowed once you fix your money.
Although the name says that you save tax, tax is applied to the interest that you earn from this FD.
You have to choose one or more nominees for your FD.

Benefits of investment in tax saver FDs

You get dual benefits of investment, among which one is tax saving, and the other is alluring interest rates. These interest rates are even higher by 0.50% for senior citizens.
You get a flexible interest payout on these FDs, i.e., monthly, quarterly as well as reinvestment of the interest amount in the principal amount.
Apart from these, you can get a loan over these FDs with a lesser rate of interest.
The majority of tax-saving FDs have an option of joint accounts in which the primary account holder avails the tax benefits.
This scheme is available at any public or private sector banks and NBFC (except co-operative and rural banks and NBFCs)

Tricks to save TDS on the interest of your tax-saving FD

Tax Deducted at Source (TDS) applies to the interest on any Fixed  Deposit (FD) if the benefit exceeds ₹10,000 per annum. To save these taxes, follow these steps:

Check if your interest in the FDs and entire taxable income of the financial year exceeds the limit of total taxable income. If it is within the limit, you can submit a self-declaration 15H or 15G form to the banks and NBFC to save the amount deducted as a part of TDS.
Invest in a manner that the interest does not exceed ₹10,000 per year. For instance, start your investment in September or October, so that the interest will be distributed between two business years.
Don’t be late in submitting the self-declaration forms.
Today, it’s easy to avail of these benefits due to net banks and NBFC.