Fixed Deposit under 80C

What are fixed deposits?

Fixed deposits is a financial saving instrument provided by the banks in India and in many other countries. Fixed deposits offers investors with a higher rate of interest when compared to a regular savings account.

The investor deposits a lump sum of money in the account for a certain period of time and earns interest on the same for that period of time. Each fixed deposit account comes with its own set of features and benefits. The longer the term of the deposit, higher the rate of interest. There are certain fixed deposit accounts that comes with tax saving options too. Fixed deposit is the safest way to build on your savings and get the best of it.

Fixed deposits under 80C

Any kind of deposit account or saving instrument that comes under section 80C of the income tax act is eligible for tax savings and tax deductions. Banks offer a fixed deposit account that qualifies for this tax deduction under section 80C of the Income Tax Act, 1961. The 5 year fixed deposit scheme offered by banks is the fixed deposit scheme that qualifies for tax deductions in India.

Features and benefits of fixed deposit under 80C

Listed below are the features and benefits of the Five year fixed deposit.

• Fixed deposit that comes with tax deductions

• There are two investment scheme options- Reinvestment type and Quarterly Interest

• Minimum deposit amount is as low as Rs.100

• Maximum deposit amount as high as Rs.1,50,000

• Lock in period of 5 years

• Premature withdrawal is not allowed

• Nomination is allowed

Tax deduction under section 80C for the fixed deposit

The five year fixed deposit account qualifies for tax deductions under section 80C of the Income Tax Act, 1961. A deduction of up to Rs.10,000 is allowed while computing total income of an individual or a Hindu United Family individual in respect to a fixed deposit of five years or more.

Eligibility criteria for fixed deposit under 80C

Listed below is the general eligibility criteria for fixed deposit under section 80C

• Minimum age- 18 years

• Any resident of India who has a PAN number is eligible

• Hindu United Families are eligible too

• Joint basis is allowed

• Minimum deposit- Rs.100

How to apply for the fixed deposit?

One can visit the official website of the bank offering the five year website and apply for it online or they can apply for it at one of the bank’s branches.