Bandhan Bank Tax Saving Fixed Deposit

Tax-saving instruments play a pivotal role in the quest for effective financial planning. Fixed Deposits (FDs), a favourite among traditional Indian investors, have long stood as a secure and reliable investment. Bandhan Bank has carved a niche for itself in this domain, offering 
Tax-Saving FDs are tailored to meet the dual objective of wealth growth and tax reduction.

Designed specifically to avail tax benefits under Section 80C of the Income Tax Act, these FDs by Bandhan Bank offer a blend of competitive returns and fiscal prudence. Dive into this blog to understand the nuances and advantages of Bandhan Bank's Tax-Saving FDs.

Duration: Tax Saving FDs usually come with a 5-year lock-in period, prohibiting any withdrawals during this time.

Interest Offerings: Competitive interest rates are a highlight, and institutions like Federal Bank often provide an additional rate increment for senior citizens.

Borrowing against FD: Given their fixed tenure, these FDs typically can't be used as loan collateral.

Interest Disbursement: Different payout options, such as monthly, quarterly, or annual intervals, might be available. Some banks also provide reinvestment of the earned interest.

Renewal Policy: Unless instructed otherwise, these FDs can be automatically renewed upon maturity for an equivalent period at the current interest rate.

Early Withdrawal Charges: Withdrawals before the end of the lock-in period aren't permissible. Withdrawing after the lock-in but before FD maturity might invite penalties.

Investment Limits: While there's a minimum deposit requirement to start a tax-saving FD, the upper limit typically remains INR 1.5 lakh annually, aligning with the 80C guidelines.

Tax Deduction at Source (TDS): TDS might be deducted if the interest income surpasses a specified limit.

• Both individuals and Hindu Undivided Families (HUFs) are qualified to invest in these tax-saving FD schemes.
• For the purpose of tax savings, one can opt for fixed deposits in either public or private sector banks. However, cooperative and rural banks don't qualify.
• A 5-year term deposit in a post office is also recognized as a tax-saving instrument.
• Deposits can be made individually or as a joint account. However, only the first account holder is entitled to the associated tax advantages.

Regarding the documents required-  

Identity Proofs

• Aadhar Card 
• Passport
• Drivers License

Address proofs

• Gas Bills
• Utility Bills
• Bank Statement Or a Cancelled Bank Cheque