It is last leg of the tax-saving season for the current financial year. The majority of investment plans that come with tax benefits come under Section 80C of the Income-tax Act, 1961, which allows the taxpayer to claim an exemption of up to Rs 1,50,000 during an FY. A five-year bank tax-saving fixed deposit (FD) is one such investment.
Let us take a look at how to open a tax-saving FD with ICICI Bank.
Also read: Three ways to invest in HDFC Bank tax-saving FDs
The minimum deposit limit for a Tax Saver FD is Rs 10,000 and the maximum is Rs 1,50,000. You can open a Tax Saver FD with ICICI Bank through any of the following channels:
How to open tax saving FD in ICICI Bank using internet banking
Step1: Log in to ICICI Bank Internet Banking.
Step 2: Go to ‘Bank Accounts’
Step 3: Select ‘Deposits’
Step 4: Click on ‘Create FD’
Step 5: Select your tax saving FD
Step 6: Enter your investment amount. …
Step 7: Select payout option.( Choose from the flexible interest payout options of monthly, quarterly or reinvestment in principal)
Step 8: Click on ‘Create FD’.
iMobile Pay:
Step 1: Log in to ICICI Bank iMobile Pay
Step 2: Click on the ‘Account & Deposits’ icon
Step3: Click on Deposits
Step 4: Click on ‘Open FD’
Step 5: Submit.
ICICI Bank offers 7% interest on tax saving fixed deposit for general citizens and 7.50% for senior citizens.
Key features of a Tax Saving FD
- A tax saving FD lets you avail of income tax exemption under Section 80C of the IT Act, 1961. The Fixed Deposit income tax exemption can be claimed on investment of up to Rs 1.5 lakh
- The lock-in period is five years
- The interest earned, as a part of the Tax Saving Fixed Deposit, is taxable, and is deducted at source.
- Premature withdrawals, Loans or Overdraft (OD) facilities are not available for a Tax Saving FD. Regular Fixed Deposits offer loan facility against deposits
- There is no auto-renewal facility for Tax Saving Fixed Deposits
- Interest pay outs are flexible; you can opt for a monthly or quarterly pay outs or reinvest in principal.
- Tax Saving FD interest rates remain unchanged over the five-year period
- Interest rates differ from bank to bank, and rates for Indian citizens, Hindu Undivided Family (HUF) also vary
- Tax Saving FDs can be held in a single or a joint mode. If it’s a joint Tax Saving Fixed Deposit, tax benefits are available only to the first account holder.
