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Bank of Baroda Tax Saving Fixed Deposit

Updated 04 Sep 2023

Balancing your investment returns and tax implications is a tedious process. Tax-saving FDs offered by banks are strategic financial tools that help you to manage your returns and claim deductions under section 80 C of the Income Tax Act. 
 

Tax-saving Fixed Deposits (FDs) have always stood out as a robust and reliable instrument in this context. Bank of Baroda, a major banking institution in India, offers such tax-saving FDs that have gained popularity among investors.

Features of Tax Saving FD offered by the Bank of Baroda

The features of Tax Saving FD offered by the Bank of Baroda are mentioned below:

  • This FD is for those investors who want to earn and save tax.
  • This allows saving tax by getting a deduction under section 80C of the Income-tax Act,1961.
  • Firms, Companies, clubs, institutions, etc., cannot invest in this scheme.
  • The minimum investment amount is ₹100, and then in multiples of 100, the amount shall not exceed ₹1,50,000 in a year to save the tax.
  • The minimum tenure is 5 years, and the maximum is 10 years.
  • It can be opened jointly, but in that case, the first holder will benefit from income tax relief.
  • The interest payout can be monthly as well as quarterly.
  • A nomination facility is available.
  • The FD amount can not be pledged as collateral.
  • A premature payment facility is not available.

Eligibility Criteria

  • Both individuals and Hindu Undivided Families (HUFs) are qualified to invest in these tax-saving FD schemes.
  • One can opt for fixed deposits in either public or private sector banks for tax savings. However, cooperative and rural banks don't qualify.
  • A 5-year term deposit in a post office is also recognised 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.

Documents Required

The documents required are as follows:

  • Identity Proof and
  • Address Proofs

These are the staples for opening any FD account, including a Tax Saving FD.

FAQs

Can I open a joint account for tax-saving FD?

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

How is a tax-saver FD different from a regular FD?

A tax-saving FD has a lock-in period of 5 years. No premature withdrawals, overdrafts, or loan facilities are available under a tax-saving FD. Whereas one can have a regular FD for any tenure as per an individual's choice, and they are eligible for premature withdrawals.

What is the lock-in period for these FDs?

The lock-in period for tax-saving FDs is typically 5 years.

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