Union Bank Tax Saving FD

What is a Union Bank Tax Saving FD?

Union Bank of India Tax Saving FD is a fixed deposit that helps depositors save taxes and offers guaranteed returns. You can invest between ₹1,000 and ₹1.5 lakh in a financial year, which qualifies for tax exemption under Section 80C of the Income Tax Act. Under the Easy Tax Saver Deposit Scheme, the bank offers 6.40% interest for regular investors and 6.90% for senior citizens. The Tax Saving FDs have a 5-year lock-in period, meaning you cannot withdraw your money before maturity.

How Does a Union Bank of India Tax Saving FD Work?

Here’s a simple breakdown of how Tax Saving FD Union Bank of India works, step by step:

• Open the FD: Apply online through net banking or visit a Union Bank branch.
• Deposit the Amount: Invest any amount from ₹1,000 to ₹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 not allowed.
• Interest Calculation: Interest is calculated on the deposit amount at the applicable fixed rate.
• Interest Payout: Choose to receive interest quarterly or at maturity.
• Maturity: At the end of 5 years, receive your deposit amount and accumulated interest.

Union Bank of India Tax Saving FD Highlights

Here are the key highlights of the Union Bank of India Tax Saver Fixed Deposit presented in a clear table for easy reference:

How to Open a Union Tax Saving FD?

The application process for a Tax Saving Fixed Deposit Union Bank of India is simple and can be done online or offline. Here’s a step-by-step guide for both options:

1. Online Application

   To open a Union Bank of India Tax Saving FD online, follow these step-by-step instructions:

   • Visit Union Bank Website or Bank App: Access the official Union Bank site or open the Vyom App to start your Tax Saving FD application.
   • Log In or Open Account: Sign in to your net banking account or mobile banking app, or create a new account if you are a first-time user.
   • Navigate to Fixed Deposit Section: Go to the Fixed Deposit section and select the Tax Saver FD option.
   • Enter Investment Details: Enter the investment amount and select the tenure of 5 years.
   • Choose Interest Payout: Select your preferred interest payout option: quarterly or at maturity.
   • Complete KYC Verification: Verify your identity and KYC details if not already completed.
   • Confirm and Submit: Review all details, submit your application, and receive the FD receipt via email or app notification.

2. Offline Application

   You can open a Union Bank of India Tax Saving FD offline as well, by following these simple steps at your nearest branch:

   • Visit Union Bank Branch: Go to the nearest Union Bank branch to start your Tax Saving FD application.
   • Fill Out Application Form: Complete the Tax Saving FD application form available at the branch.
   • Submit Required Documents: Provide ID proof, address proof, and PAN card for verification.
   • Deposit Investment Amount: Pay via cheque, cash, or account transfer.
   • Collect FD Receipt: Receive the FD receipt as proof of your investment.
   • Confirmation and Record: Ensure all details are correctly recorded, and keep the FD receipt safely for future reference.

Who Should Consider Union Bank of India Tax Saving FD?

The following types of investors are eligible and can benefit from investing in a Union Bank of India Tax Saving FD:

• Looking for Tax Benefits: Anyone aiming to reduce taxable income while saving securely should consider this FD.
• Resident customers: Depositors who are residents of India can invest in Union Bank Tax Saving FD to save taxes and earn guaranteed returns.
• HUFs: Hindu Undivided Families (HUFs) are also eligible to invest in Union Bank Tax Saving FD and benefit from its features.
• Long-Term Savings Goal: Investors or HUFs planning disciplined savings over a 5-year tenure can benefit from the lock-in and guaranteed interest.

TDS on Union Bank Tax Saving FD

Tax Deducted at Source (TDS) on interest from Union Bank of India Tax Saving FDs is applicable when the total interest payable or reinvested per customer across all branches exceeds ₹50,000 in a financial year for regular investors and ₹1,00,000 for senior citizens. Investors must provide their PAN as per Section 139A(5A) of the Income Tax Act to ensure proper credit of TDS and issuance of TDS certificates. Residents can also avoid TDS by submitting a declaration in Form 15G or Form 15H, confirming that tax on their total income will be nil, provided the PAN is updated in the bank records.

Key Takeaways

Union Bank Tax Saver FD provides a secure way to save taxes and earn guaranteed returns. Investments qualify for a deduction of up to ₹1.5 lakh under Section 80C, with a 5-year tenure ensuring disciplined saving. The rate of interest of tax-saving FD stands at 6.40% for regular investors and 6.90% for senior citizens. The minimum deposit is ₹1,000, and the maximum deposit is ₹1.5 lakh in a financial year as per Section 80C of the Income Tax Act. While these schemes offer significant tax breaks, comparing the overall FD interest rate across different banks can help you determine if the tax savings outweigh the potential returns of a standard high-yield deposit.