Updated 31 Aug 2023
In the vast financial universe, finding effective tools for tax mitigation while securing sound returns is crucial. SBM Bank emerges as a trusted partner in this journey, offering its Tax-Saving Fixed Deposits to strike the perfect balance. These FDs promise competitive interest rates and provide tax deductions under Section 80C of the Income Tax Act.
Through this blog, we'll unravel the facets of SBM Bank's tax-saving FDs, assisting you in navigating the terrain of intelligent investing and tax benefits. Join us as we demystify the synergy between savings and tax optimisation at SBM Bank.
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.
Regarding the documents required-
Identity Proofs
Address proofs
What is the main purpose of SBM Bank's Tax-Saving FD?
It is a tax-saving instrument where investments are eligible for deductions under Section 80C of the Income Tax Act.
What is the lock-in period for these FDs?
The lock-in period for tax-saving FDs is typically 5 years.
Can I withdraw my FD before the lock-in period ends?
No, premature withdrawals are not allowed during the lock-in period.
What is the interest rate offered on these FDs?
The interest rates vary, and SBM Bank might offer differential rates for general customers and senior citizens. Always check the latest rates on their official website.
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