Individuals seeking tax deductions with fixed returns can opt for tax-saving fixed deposits (FDs) with a maximum investment limit of Rs 1.5 lakh. These FDs come with a lock-in period of five years, allowing a deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act, 1961 for those following the old tax regime.
However, the new tax regime does not offer this deduction. DCB Bank offers an impressive 7.4% interest rate on tax-saving FDs for individuals below 60 years of age. IndusInd Bank and YES Bank both provide a competitive 7.25% interest rate on FDs with a tenure of five years. Meanwhile, HDFC Bank offers 7% interest on tax-saving FDs. The interest earned on these FDs is taxable.