• Investments of upto INR 1,00,000 made in the 5 year tax saver bank FD are eligible for deduction from taxable income.
• Any individual or Hindu Undivided Family (HUF) can invest in the Bank FD under this scheme.
• Account can be opened in single or joint names. In case of a joint FD the tax benefit will be available only to the first account holder.
• The FD made under the tax saving scheme cannot be pledged. Also the scheme does not allow sanction of any loans against the FD offered as security.
• The lock-in period for investment in this FD is 5 years. Also partial withdrawals before maturity and premature withdrawals are not allowed.
• The interest earned on the FD is fully taxable.
• The bank may pay the interest on the FD on a monthly, quarterly, half yearly, yearly or cumulative (on maturity) basis. The investor can choose the interest option from the options made available by the bank. The investor can ask the bank to credit the interest into his savings account in case he wishes to receive the interest on a monthly or quarterly basis.
• The FD comes with nomination facility. The investor can appoint a nominee either at the time of opening the FD or anytime during the tenure of the FD before maturity.
• The FD can be transferred from one branch of the bank to another branch of the bank on the request of the investor.
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