Federal Bank Tax Saving FD

What is a Federal Bank Tax Saving FD?

Federal Bank Tax Saving FD is a fixed deposit scheme that allows you to save taxes under Section 80C of the Income Tax Act while earning assured returns. You can start with a minimum deposit of ₹100 and invest in multiples of ₹100 up to a maximum of ₹1.5 lakh in a financial year. Tax Saving FDs come with a fixed lock-in of 5 years, and the amount can only be withdrawn after maturity. The interest rate is 6.60% for general citizens and 7.25% for senior citizens. 

How Does a Federal Bank Tax Saving FD Work?

Here is how the Tax Saving Fixed Deposit Federal Bank functions, explained in simple steps below:

• Open the FD: Apply online via Federal Bank NetBanking, FedMobile app, or by visiting your nearest branch.
• Deposit the Amount: You can invest any amount starting from ₹100 and in multiples of ₹100, subject to a maximum of ₹1,50,000 in a financial year, eligible for tax benefits under Section 80C.
• Interest Payout Options: Select to receive interest monthly, quarterly, or at maturity.
• Lock-in Period: The FD remains locked for 5 years; no premature withdrawal is allowed.
• Maturity: At the end of 5 years, you receive the principal plus accumulated interest.

Federal Bank Tax Saving FD Highlights

Here are the key highlights of the Federal Bank Tax Saver Fixed Deposit:

How to Open a Federal Bank Tax Saving FD?

You can apply both online and offline to open a Federal Bank Tax Saver FD. Here’s how the process follows:

1. Online FD Booking

   To open a Federal Bank Tax Saving FD online using Internet Banking or the FedMobile app, follow these steps:

   • Login: Visit the Federal Bank website or FedMobile app and sign in using your credentials.
   • Select FD Option: Go to the Fixed Deposit section and choose “Tax Saving FD”.
   • Enter Investment Details: Provide the investment amount (₹100 to ₹1.5 lakh) and confirm the 5-year tenure.
   • Choose Payout Option: Select monthly, quarterly, or maturity interest payout.
   • Complete KYC: Ensure KYC is updated; submit documents if required. Submission of a copy of the PAN card is mandatory for opening a Tax Savings Deposit.
   • Confirm & Submit: Review details, submit the request, and receive the FD receipt online.

2. Offline FD Booking

   If you prefer a face-to-face experience, you can easily open a Federal Bank Tax Saving FD by visiting your nearest branch. Here’s how the process works:

   • Visit the Branch: Go to the nearest Federal Bank branch and request the Tax Saver FD application form.
   • Fill the Form: Enter your personal details, deposit amount, and the fixed tenure of 5 years.
   • Submit Documents: Provide the required KYC documents such as PAN card (mandatory), Aadhaar, or address proof.
   • Make the Payment: Deposit your investment amount through cheque, cash, or account transfer.
   • Collect FD Receipt: Receive the FD receipt as proof of your investment.

Who Should Consider Federal Bank Tax Saving FD?

Federal Bank Tax Saving FD is suitable for different categories of depositors. Some of these may include:

• Tax Savers: Individuals seeking to reduce taxable income under Section 80C.
• Resident Customers: Indian residents looking for assured returns.
• HUFs: Hindu Undivided Families eligible for tax-saving investments.
• Safe Return Seekers: Those preferring stable and guaranteed earnings.
• Long-Term Investors: People willing to lock funds for 5 years for disciplined savings.

TDS on Federal Bank Tax Saving FD

Investments in a Federal Bank Tax Saving FD qualify for tax deductions under Section 80C of the Income Tax Act, up to ₹1.5 lakh in a financial year. Tax Deducted at Source (TDS) is applicable if the interest earned exceeds ₹50,000 in a financial year (₹1,00,000 for senior citizens). Investors must also provide their PAN as per Section 139A(5A) of the Income Tax Act to ensure proper credit of TDS and issuance of TDS certificates. To avoid TDS, customers can submit Form 15G or Form 15H if their annual income is below the exemption limit.

Key Takeaways

Federal Bank Tax Saver FD is an investment option that helps you save taxes while earning assured returns. Investments qualify for a deduction of up to ₹1.5 lakh under Section 80C, with a mandatory 5-year lock-in period ensuring disciplined savings. The rate of interest of tax-saving FD is 6.50% for general citizens and 7.00% for senior citizens. Unlike regular FDs, premature withdrawal and loans against this FD are not permitted. With flexible deposits starting from ₹100, and attractive FD interest rates, it offers the convenience of applying both online and offline.