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Bandhan Bank Tax Saving Fixed Deposit

Updated 30 Aug 2023

Tax-saving instruments play a pivotal role in the quest for effective financial planning. Fixed Deposits (FDs), a favourite among traditional Indian investors, have long stood as a secure and reliable investment. Bandhan Bank has carved a niche for itself in this domain, offering 
Tax-Saving FDs are tailored to meet the dual objective of wealth growth and tax reduction.


Designed specifically to avail tax benefits under Section 80C of the Income Tax Act, these FDs by Bandhan Bank offer a blend of competitive returns and fiscal prudence. Dive into this blog to understand the nuances and advantages of Bandhan Bank's Tax-Saving FDs.

Features of the Tax-Saving FDs

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.

Eligibility Criteria and Documents Required

  • Both individuals and Hindu Undivided Families (HUFs) are qualified to invest in these tax-saving FD schemes.
  • For the purpose of tax savings, one can opt for fixed deposits in either public or private sector banks. However, cooperative and rural banks don't qualify.
  • A 5-year term deposit in a post office is also recognized as a tax-saving instrument.
  • Deposits can be made individually or as a joint account. However, only the first account holder is entitled to the associated tax advantages.

Regarding the documents required-  

Identity Proofs

  • Aadhar Card 
  • Passport
  • Drivers License

Address proofs

  • Gas Bills
  • Utility Bills
  • Bank Statement Or a Cancelled Bank Cheque


Can I open a joint account for this FD?

Yes, you can open a joint account. However, the tax benefit is applicable only to the first account holder.

Is TDS applicable on the interest earned?

Yes, if the interest earned exceeds the threshold limit specified by the government, TDS (Tax Deducted at Source) will be applicable.

Can I avail of a loan against this FD during the lock-in period?

Typically, loans against Tax Saving FDs during the lock-in period are not provided by the bank.


Disclaimer: Wint Wealth makes no guarantee or warranty on the accuracy of the data provided on this site, the information displayed is subject to change and are provided on an as-is basis. Nothing contained herein is intended to or shall be deemed to be investment advice, implied or otherwise. You are advised to make your own enquiries, consult a professional advisor and verify the information prior to taking any investment decisions. We accept no liability for any loss arising from the use of information contained on this website.

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