IDBI Bank Tax Saving FD

What is IDBI Bank Tax Saving FD?

IDBI Tax Saving FD is a fixed deposit product offered by IDBI Bank. It is a tax-saving option under Section 80C of the Income Tax Act of 1961. It allows investors to save up to Rs 1.5 lakh in taxes by investing in a five-year tax-saving fixed deposit. The interest earned on the deposit is fully taxable per the income tax slab rate applicable to the investor. This investment product offers liquidity through the premature withdrawal facility.

IDBI Bank offers Tax Saving Fixed Deposits (FDs) with a lock-in period of 5 years. These FDs are eligible for tax rebates under Section 80C of the Income Tax Act. The interest earned on these FDs is taxable, and the interest rate offered is the same as the rate applicable to the regular FDs of the Bank.

Eligibility Criteria For the IDBI Tax Saving FD Scheme

The applicant is required to meet the following eligibility criteria to invest in the IDBI Tax Saving FD.

1. The IDBI Tax Saving FD scheme is open to Indian resident individuals, HUFs (Hindu Undivided Family), Non-Resident Indians (NRIs), and companies.

   2. The minimum deposit amount is Rs. 100 multiplied by Rs.100 after that.

   3. The maximum deposit amount is limited to Rs.1.5 lakhs per financial year.

   4. The tenure of the FD is five years.

   5. The interest rate ranges from 6.25% to 7.25% per annum, depending on the amount and tenure. 6. The interest earned is subject to tax deduction at source (TDS).

   7. Premature withdrawal is allowed, but a penalty of 1% of the deposit will be charged if the withdrawal is made before the completion of the tenure.

   8. The deposit can be made through cheque, demand draft or online. 9. The deposit can also be made through systematic investment plans (SIPs), wherein the deposit amount is pre-decided and fixed for a certain period.

Documents Required To Open an IDBI Tax Saving FD

The applicants must produce the following documents at the time of application for an IDBI Tax saving FD.

1. KYC Documents – Identity Proof: Passport/ PAN Card/ Voter ID/ Driving License/ Aadhar Card/ NREGA Card

   2. KYC Documents – Address Proof: Passport/ Driving License/ Voter ID/ Aadhar Card/ Utility Bill (not more than three months old)

   3. Bank Statement (not more than three months old)

   4. Passport Size Photographs

   5. Cancelled Cheque

   6. Application Form

   7. PAN Card Copy

   8. TDS Certificate (if applicable)

Key Attractions on Opening an IDBI Tax Saving FD

The IDBI Tax Saving FD offers the following attractions to investors with the IDBI TAx saving FD.

1. Tax Benefits: IDBI Tax saving FD allows investors to save taxes under Section 80C of the Income Tax Act. Investing in this FD scheme can save up to ₹46,800 in taxes yearly.

2. Attractive Interest Rates: IDBI Tax saving FDs offer higher interest rates than regular FDs. This makes it an ideal choice for investors looking to earn higher returns.

3. Flexibility: IDBI Tax saving FD allows investors to choose their tenure and deposit amount. This will enable investors to customise their investments to suit their needs.

4. Liquidity: IDBI Tax saving FDs are highly liquid investments. Investors can withdraw their funds after the completion of the lock-in period. 5. Safety: IDBI Tax saving FDs are backed by the government of India. This ensures that the investment is safe and secure.

Features & Benefits For an IDBI Tax Saving FD Scheme

The IDBI Tax Saving FD offers the following features and benefits to its depositors:

1. Tax Benefits: IDBI Tax Saving FD offers tax deductions up to Rs. 1.5 lakhs under section 80C of the Income Tax Act. This helps to reduce the overall income tax liability of an individual.
2. Attractive Interest Rates: IDBI Tax Saving FD offers an attractive interest rate of up to 7.7% p.a., higher than the normal rate of interest provided on regular FDs.
3. Long Tenure: The tenure of IDBI Tax Saving FD can range from 5 years to 10 years, which gives investors more time to achieve their financial goals.
4. Flexibility: Investors can deposit a lump sum amount or opt for a systematic investment plan (SIP) to invest in IDBI Tax Saving FD.
5. Safety: IDBI Tax Saving FD is one of the safest investments as the Government of India backs it. This reduces the risk of capital loss and helps investors to earn a steady return on their investment.

How to Apply for an IDBI Bank Tax Saving FD?

Applicants are required to implement the following steps to establish an IDBI Bank Tax saving FD.

1. Visit the IDBI Bank branch nearest you and collect the Fixed Deposit Form.
   2. Fill out the form and provide all the necessary details.
   3. Provide the PAN Card and other KYC documents.
   4. Choose the tenure that best suits your needs.
   5. Make the payment as per the instructions.
   6. Submit the form along with the documents and payment.
   7. The bank will process your application and issue you a Fixed Deposit Receipt.