Canara Bank Tax Saving FD

What is a Canara Bank Tax Saving FD?

The Canara Bank Tax Saver FD offers a combination of tax savings and assured fixed returns. You can start investing with as little as ₹100 and go up to ₹1.5 lakh per year, with the invested amount eligible for tax deductions under Section 80C. The scheme comes with a mandatory lock-in of 5 years, during which premature withdrawals and loans against the FD are not allowed. The rate of interest of Tax Saving FDs differs for senior citizens and regular investors and may change as per the bank’s periodic rate revisions.

How a Canara Bank Tax Saving FD Works

To understand how the Tax Saving Fixed Deposit Canara Bank operates, here’s a simple breakdown from account opening to maturity:

• Account Opening: Select the Canara Bank Tax Saver FD scheme and deposit an amount up to ₹1.5 lakh in a financial year as per Section 80C of the Income Tax Act.
• Lock-in Period: Your money is locked for 5 years, with no premature withdrawals or loans against the deposit.
• Earning Returns: The deposit earns interest as per Canara Bank’s prevailing FD interest rates, with flexible options for payout (monthly, quarterly, or cumulative).
• Maturity: After 5 years, the bank credits your principal plus accumulated interest directly to your linked account.

Canara Bank Tax Saving FD Highlights

Here are the key features of the Canara Bank Tax Saver Fixed Deposit presented in a simple table format:

How to Open a Canara Bank Tax Saving FD?

The Canara Bank Tax Saver FD can be opened conveniently either online through digital banking or offline at a branch, giving you flexibility.

1. Online FD Booking

   Follow these simple steps to create your Tax Saver FD online:

   • Log In: Access your account through the Canara Bank Internet Banking portal or the convenient Mobile Banking application (Canara ai1).
   • Go to Deposits: Navigate within the menu and open the dedicated section for managing Fixed Deposits.
   • Select Scheme: From available deposit products, choose the specific option named ‘Tax Saver FD’ scheme.
   • Enter Details: Provide investment amount, tenure, and select your preferred interest payout method carefully.
   • Review & Confirm: Recheck tenure, FD interest rates, nominee, and linked bank account before submission.
   • Acknowledgement: Once submitted, the Tax Saving FD gets created instantly, and a digital receipt is generated.

2. Offline FD Booking

   Follow these easy steps if you wish to open your Tax Saver FD offline at a Canara Bank branch:

   • Visit Branch: Head to your nearest Canara Bank branch to start the Tax Saver FD process.
   • Request Form: Collect and fill out the Tax Saving FD application form carefully with all required details.
   • Provide KYC: Submit PAN card, identity proof, and address proof documents along with the filled form.
   • Deposit Money: Pay your investment amount using a cheque, cash, or direct transfer as per the branch rules.
   • Collect Receipt: Obtain your FD acknowledgement receipt from the bank as confirmation of deposit creation.
   • Start Earning Interest: Your Tax Saving FD will start earning interest from the date of the deposit investment.

Who Should Consider Canara Bank Tax Saving FD?

Here’s who can benefit the most from a Canara Bank Tax Saver FD:

• Tax-Savers: Suitable for individuals who wish to reduce taxable income under Section 80C while earning assured returns.
• Conservative Investors: Depositors seeking stable, risk-free returns rather than volatile market-linked instruments.
• HUFs: Hindu Undivided Families can also benefit from this FD for tax planning and wealth management.
• First-Time Depositors: A suitable option for new investors wanting to start safe and disciplined financial planning.
• Salaried Employees: Practical for professionals looking to save tax each year while growing their money safely.

TDS on Canara Bank Tax Saving FD

Deposits made under Tax Saving FD Canara Bank qualify for deductions up to ₹1.5 lakh in a financial year under Section 80C. However, the interest earned is fully taxable as per your income tax slab. Tax Deducted at Source (TDS) applies if annual interest exceeds ₹50,000 for regular customers and ₹1,00,000 for senior citizens. To avoid unnecessary TDS deductions, investors can submit Form 15G or Form 15H, provided their total income is below the taxable limit. But if the projected FD interest crosses the exemption threshold under Section 197A(1B), TDS will still be deducted.

Key Takeaways

Canara Bank Tax Saving FD offers guaranteed returns with tax-saving benefits, along with a mandatory 5-year lock-in. Investors can claim deductions up to ₹1.5 lakh under Section 80C. The FD interest rates offered by the bank differ depending on how long you invest and your customer type. The rate of interest of Tax Saving FD may also vary as the bank revises it from time to time. Since the interest is taxable, TDS applies, but you can easily start this FD through online or offline channels.