Winning Bizness Desk
Mumbai. Few people wait till the end of fiscal year to make tax planning, however, investment for this should be started from the beginning of the new financial year. If you want to save tax and invest in a place where your money is safe, then Tax Savings FD (5 year) and Post Office National Savings Certificate (NSC) scheme may be right for you which offer 7.7% annual interest along with tax exemption. Investment in NSC scheme also has to be made for 5 years. Apart from the Post Office National Savings Certificate Scheme, Winning Bizness tells you how much interest the major banks of the country are offering on 5-year tax saving FDs. Most banks offer up to 0.50% more interest on FDs to senior citizens. In such a situation, if there is a senior citizen in your house, then you can earn more profit by getting FD done in their name.
Post Office NSC
Whopping 7.7% annual interest earned on investment in Post Office National Saving Certificate (NSC), in which the interest is calculated on an annual basis, but the interest amount is given only after the investment period. To open its account, you have to invest a minimum of Rs 1000, which can also be opened in the name of a minor and a joint account in the name of 3 adults. Tax exemption is available under Section 80C of Income Tax on the amount deposited in the National Saving Certificate. Its maturity period is 5 years. You cannot exit the scheme before this. You can invest any amount in NSC and there is no maximum limit of investment in it. Tax saving FD matures in five years and by investing in this, you can claim a deduction of Rs 1.5 lakh from your total income under Section 80C of the Income Tax Act. In simple language, understand it like this, you can reduce up to 1.5 lakhs from your total taxable income through Section 80C.
Keep these things in mind
If you are planning to invest Rs 10 lakh in FD in a single bank, then instead invest in 9 FDs of Rs 1 lakh and 2 FDs of Rs 50,000 in more than one bank. With this, if you need money in between, you can arrange money by breaking the FD in between as per your need. Your remaining FDs will remain safe. Earlier there was an option to withdraw interest on quarterly and annual basis in the bank, now in some banks you can also do monthly withdrawal. You can choose it according to your needs. You can also take a loan on your FD. Under this, you can take a loan up to 90% of the value of FD. Suppose the value of your FD is Rs 1.5 lakh, then you can get a loan of Rs 1 lakh 35 thousand. If you take a loan on FD, then you will have to pay 1-2% more interest than the interest received on fixed deposit. For example, suppose you are getting 6% interest on your FD, then you can get a loan at an interest rate of 7 to 8%.
