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Dhanlaxmi Bank Tax Saving Fixed Deposit

Updated 31 Aug 2023

Tax-saving instruments play a pivotal role in smart portfolio management in the vast financial landscape. Dhanlaxmi Bank’s Tax-Saving Fixed Deposits emerge as a frontrunner, combining the security of traditional FDs with the added advantage of tax benefits. Designed under Section 80C of the Income Tax Act, these FDs offer competitive returns and reduce your taxable income.

 

In this blog, we delve deep into the nuances of Dhanlaxmi Bank's tax-saver FDs, guiding you to make informed decisions for a balanced financial future. Step in as we navigate the dual rewards of growth and tax savings together.

Features of 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

FAQs

What is the main purpose of Dhanlaxmi Bank's Tax-Saving FD?

It is a tax-saving instrument where investments are eligible for deductions under Section 80C of the Income Tax Act.

What is the lock-in period for these FDs?

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

Can I withdraw my FD before the lock-in period ends?

No, premature withdrawals are not allowed during the lock-in period.

What is the interest rate offered on these FDs?

The interest rates vary, and Dhanlaxmi Bank might offer differential rates for general customers and senior citizens. Always check the latest rates on their official website.

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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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