Tax Saver Fixed Deposit
For our risk averse customers, SBM Bank offers a range of investment securities that assist with capital protection. One such investment instrument you can select to prevent the erosion of the capital amount invested, while earning stable returns at a pre-determined interest rate, is the Tax-Saving Fixed Deposit.
Now you can open your Tax-Saving FDs online as an SBM Savings Account holder and reduce your annual tax outgo. Considered as one of the safest investment instruments, the FD comes with a minimum investment tenure of 5 years. Also, the interest rates applicable to this Tax-Saving deposit are typically higher than traditional bank FD interest rates.
Features Of A Tax-Saving Fixed Deposit
The SBM Tax-Saving Fixed Deposit come packed with some salient features, which are as follows:
Open Online
As an SBM Bank accountholder, you can easily open your Tax-Saving FD online through your internet banking account. You can also visit your nearest SBM Bank Branch with your basic KYC documents to open the FD account. Additionally, you may hold the FD account on an individual or joint basis. Non SBM Bank customers can open a stand-alone FD online within a few minutes.
Investment and Tax Clause
You can get a fixed deposit income tax exemption on annual investments of up to INR 1,50,000 under Section 80C of the Income Tax Act, 1961. INR 150,000 is also the maximum investment limit, which means your FD amount cannot exceed this threshold.
Interest Rates
Enjoy competitive interest rates that change with varying tenures. The rate is locked in for the entire duration of the FD. Senior citizens opting for the Tax-Saving FD can get a 0.5% higher interest rate on their deposits.
Investment Tenure
The minimum investment tenure for these FDs is 5 years to qualify for the tax-saving benefits. You may also lock-in your principal amount for tenures lasting up to 10 years. Additionally, you can open a new Tax-Saving FD of up to INR 150,000 every year as part of your annual 80C investments.
Interest Payment Modes
You can choose between cumulative and non-cumulative interest payment modes. If you choose the former, you will receive the interest income along with the principal investment when the FD matures. In case of the non-cumulative interest payment model, you can choose from monthly, quarterly, half-yearly and annual interest payments.
Benefits of Opting for a Tax-Saving FD
Some notable benefits of the Tax-Saving Fixed Deposits include the following:
- You have the option to transfer funds from your Savings Account to create an FD account.
- You can choose your preferred interest payment model between cumulative and non-cumulative.
- Tax-Saving FDs are deemed one of the safest investment instruments with little to no risk of capital erosion.
- The interest income on Tax-Savings FDs is generally higher than that paid on Savings Account deposits or regular bank FDs.
- You may assign a nominee for your Fixed Deposit.
Tax-Saving FD Eligibility
Any one of the following are eligible to open a Tax-Saving FD:
- Individual investors
- Members of Hindu Undivided Families
- Minors (as joint members for FDs opened by adult family members)
Important Tax Saver FD Disclaimers
Consider the following terms and conditions associated with investing Tax-Saving Fixed Deposits:
- The interest income accrued on the tax-saving FD is subject to Tax Deducted at Source (TDS) per your tax slab.
- You can avoid the TDS by duly filing and submitting Form 15G/15H (for senior citizen investors), if applicable.
- You cannot use the deposit as a security against a loan.
- You may not mortgage the FD against any other asset.
- You cannot prematurely withdraw the deposit (either principal or accrued interest) before the FD matures.
Investing In A Tax-Saving Fixed Deposit
You may or may not be a SBM Bank savings account holder to open a Tax-Saving FD online or offline with SBM Bank.
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The Online ProcessAs an existing SBM Bank Savings Account holder, you can simply log in on your internet banking platform and locate the option for creating fixed deposits. Once you are in the FD menu, you must choose the tax-saver FD, the investment amount, and your preferred interest payment mode. The bank debits the investment amount from your Savings Account and creates the FD account upon receiving your request. |
 | The Offline ProcessYou can also visit our nearest SBM Bank branch and open the FD offline. Our bank representative shall provide you an application form wherein you must enter details like your name, contact number, e-mail ID, PAN, nomination details, etc. You must provide details of the bank account you intend to use to fund your FD account or transfer funds from your newly opened SBM Savings Account. Once you complete this process, the bank opens your FD Account. |
Related Products
Recurring Deposit
Besides the Tax-Saving FD, we at SBM Bank also provide Recurring Deposit products. An RD is a safe, secure, and efficient way to invest a fixed amount each month and create a significant capital amount. The interest rates on RDs are typically lower than those on FDs, but RDs come with premature withdrawal provisions and investment tenures ranging from 6 months to ten years.
FAQs
When your Tax-Saving FD matures, the bank transfers the deposit amount in your linked Savings Account. The final amount deposited into your account depends on whether you have opted for a cumulative or non-cumulative Tax-Saving Fixed Deposit scheme.
Every bank has the discretion to determine the tax-saving FD interest rate. Most banks typically offer competitive interest rates on Tax-Saving Fixed Deposits.
Tax-Savings FDs may be closed prematurely only in the event of the demise of the FD holder. In such cases, the appointed nominee or legal heir of the depositor can withdraw the FD.
To open an FD using a paper-based physical application, you will typically need to provide a passport size photo, along with a copy of your PAN Card, government-recognised ID and address proof. Senior citizen applicants must provide a copy of their age proof as well. In case of online applications, you may need to go through a video KYC-based verification process. In this case, you need to turn your video camera on and show yourself. The bank agent on the video call will ask you to show the original copies of your PAN card and Aadhaar, along with other verification steps.