Indian Bank Tax Saving FD 

What is an Indian Bank Tax Saving FD?

Indian Bank Tax Saving FD under the IB Tax Saver Scheme allows depositors to avail tax benefits while earning assured returns on their investment. The minimum investment is ₹1000, with a maximum limit of ₹1.5 lakh per financial year, eligible for tax deduction under Section 80C of the Income Tax Act. Senior citizens are offered higher returns with an additional 0.50% per annum. 

The interest rate offered to the regular investors is 6%, whereas it is 6.50% for senior citizens. Interest can be received quarterly or at maturity, depending on the depositor's preference. The Tax Saving FDs have a mandatory 5-year lock-in period, meaning premature withdrawal is not permitted during this tenure.

How Does an Indian Bank Tax Saving FD Work?

Here is a clear and concise guide to help you understand the functioning of an Indian Bank Tax Saving Fixed Deposit:

• Open the FD: Apply for an FD directly on the official Indian Bank website or visit the nearest Indian Bank branch.
• Deposit the Amount: Invest a minimum of ₹1000 up to a maximum of ₹1.5 lakh in a financial year, as per Section 80C of the Income Tax Act.
• Lock-in Period: The deposit is locked for 5 years; premature withdrawal is prohibited.
• Interest Calculation: Interest is calculated on the deposit amount at the applicable fixed rate.
• Interest Payout: Choose to receive interest quarterly, monthly, with a discount, or at maturity.
• Maturity: At the end of 5 years, receive your deposit amount and accumulated interest.

Indian Bank Tax Saving FD Highlights

The key features of the Tax Saving Fixed Deposit Indian Bank are outlined below in a structured table for quick and easy reference:

How to Open an Indian Bank Tax Saving FD

Applying for an Indian Bank Tax Saving Fixed Deposit (FD) is straightforward and can be done online or offline.

1. Online FD Booking

   The online process of opening an Indian Bank Tax Saving FD is as follows:

   • Access the Online Portal: Visit the official Indian Bank website and navigate to the "IND SWAGAT - Online Term Deposit Opening" section.
   • Initiate FD Opening: Click the "Open Account" option to begin the application process.
   • Provide Personal Details: Enter your personal information, including Aadhaar number, for KYC verification.
   • Select FD Type: Choose "Tax Saving FD" as the type of fixed deposit.
   • Enter Investment Amount and Tenure: Specify the amount (between ₹1,000 and ₹1.5 lakh) and select the 5-year tenure.
   • Choose Interest Payout Option: Opt for the interest payout at maturity per the scheme's terms.
   • Complete KYC Verification: Authenticate your identity using Aadhaar-based OTP for seamless KYC completion.
   • Fund the Deposit: Transfer the investment amount using any bank's UPI or other available online payment methods. 
   • Receive FD Receipt: Upon successful transaction, download the FD receipt and confirmation for your records.

   Note: The online application facility is available from 8:00 AM to 8:00 PM. 

2. Offline FD Booking

   For those who prefer in-person assistance, Indian Bank provides an offline application process:

   • Visit a Branch: Go to your nearest Indian Bank branch.
   • Obtain Application Form: Request the bank's Tax Saving FD application form.
   • Fill Out the Form: Complete the form with correct personal and investment details.
   • Submit KYC Documents: Provide necessary documents for KYC verification, including Aadhaar card, PAN card, and a passport-sized photograph.
   • Make the Investment: Deposit the amount (between ₹1000 and ₹1.5 lakh) via cheque, demand draft, or cash, per the bank's guidelines.
   • Receive FD Receipt: Collect the FD receipt and acknowledgement from the bank after processing.

Who Should Consider the Indian Bank Tax Saving FD?

The following categories of customers may find the Indian Bank Tax Saving FD beneficial:

• Tax-Conscious Investors: Investors seeking to reduce their taxable income can invest up to ₹1.5 lakh in this FD to avail tax deductions under Section 80C. 
• HUFs: Hindu Undivided Families (HUFs) who wish to invest collectively and also claim Section 80C benefits. 
• Senior Citizens: Eligible for an additional interest rate of 0.50% annually, enhancing their returns. 
• Risk-Averse Investors: Depositors preferring safe, fixed-return investments over market-linked options can opt for this FD.
• Long-Term Savers: Investors aiming for disciplined savings over a 5-year tenure may find it suitable, as the FD has a mandatory lock-in period. 

Tax Deductions for Indian Bank Tax Saving FD

Interest earned on Indian Bank Tax Saver FD is taxable. Tax Deducted at Source (TDS) applies if the total annual interest from all Indian Bank FDs exceeds ₹50,000 for regular depositors or ₹1,00,000 for senior citizens. Providing a valid PAN ensures accurate TDS credit, while eligible investors may submit Form 15G or 15H to avoid TDS if their total income falls below the taxable limit.

Key Takeaways

Indian Bank Tax Saving FD provides tax deductions of up to ₹1.5 lakh per financial year under Section 80C of the Income Tax Act. This ensures tax savings and safe returns. It has a fixed 5-year lock-in period and offers attractive, assured FD interest rates. The FD interest rate is 6% p.a. for general customers and 6.50% p.a. for senior citizens. The rate of interest of tax-saving FD can be received quarterly, monthly, or at maturity. While loans and premature withdrawals are not permitted, the nomination facility is available, ensuring convenience and security for depositors.