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Fincare Small Finance Bank Tax Saving Fixed Deposit

Updated 07 Sep 2023

Saving and investing wisely helps achieve financial goals and plays a crucial role in reducing tax liabilities. With the myriad of investment options available today, choosing the one that aligns well with your financial targets and tax-saving objectives is essential. One such attractive investment avenue is the tax-saving Fixed Deposit (FD) offered by Fincare Small Finance Bank.

 

Tax-saving FDs distinguish themselves from regular FDs primarily through their tenure and the tax benefits they extend to the investors. Fincare Small Finance Bank offers investors a lucrative opportunity to enjoy tax benefits while securing investments in a safe and stable medium.

Features of the Tax-saving FDs

  • The interest earned on all types of FDs is included in the total income and is taxable per the prevailing slab rate.
  • As per section 80C of the Income-tax Act 1961, the investor gets an exemption of ₹1,50,000 in tax saver FD investment.
  • For a senior citizen (Aged above 60 years), a deduction of up to ₹50,000 is available; for non-senior citizens, up to ₹40,000.
  • If the PAN is not provided, then, in that case, 20% TDS is levied.
  • If your total income is below the taxable limit, i.e., Rs. 2.5 lakhs, you can avoid TDS by submitting Form 15G to the bank.
  • For senior citizens, if your total income is below the taxable limit, you can avoid TDS by submitting Form 15H to the bank.

In-Depth Features of Tax-Saving FDs

 

Duration: Tax Saving FDs usually have a 5-year lock-in period, prohibiting any premature withdrawals.

Interest Offerings: Fincare Small Finance Bank offers competitive interest rates, with additional benefits for senior citizens.

Borrowing against FD: These FDs typically can't be used as loan collateral due to their fixed tenure.

Interest Disbursement: Investors can choose from different payout options, such as monthly, quarterly, or annual intervals. There's also the option of reinvesting the earned interest.

Renewal Policy: Unless communicated otherwise, these FDs are automatically renewed upon maturity for the same period at the prevailing interest rate.

Early Withdrawal Charges: Withdrawals aren't permissible before the end of the lock-in period. However, post-lock-in, penalties may apply if one opts to withdraw before maturity.

Investment Limits: There's a minimum deposit requirement to start a tax-saving FD, but the upper cap is usually at INR 1.5 lakh annually, aligning with the 80C guidelines.

Tax Deduction at Source (TDS): TDS might be applicable if the interest income exceeds a certain threshold.

Eligibility Criteria for Opening a Tax-Saver FD with Fincare Small Finance Bank

  • Resident Individuals: Any individual residing in India can open a Tax-saving FD with Fincare Small Finance Bank.
  • Hindu Undivided Families (HUF): The Karta of the HUF can open a Tax-saving FD on behalf of the family.
  • Minors: Minors are allowed to open an FD through a guardian.
  • Single or Joint Accounts: Both types of accounts can be opened. However, the tax benefit under section 80C typically applies only to the first account holder for joint accounts.
  • Existing Fincare Bank Customers: Existing customers can easily open a Tax-saving FD online since their KYC details are already with the bank. New customers might need to undergo the complete KYC procedure.
  • Amount: The minimum amount required for investment starts from a nominal sum, e.g., ₹100, but can go up to ₹1.5 lakhs annually for availing the 80C benefit.

Documents required for Fincare Small Finance Bank FD account

For those who aren't existing customers:

 

For Identity Proof and Signature Proof

  • PAN Card
  • Driving License
  • Passport
  • Voter’s ID
  • Aadhar Card

For Address proof

  • PAN Card
  • Driving License
  • Passport
  • Voter’s ID
  • Aadhar Card
  • Utility Bill
  • Bank account Passbook (Updated and not more than 3 months old)

FAQs

What is the maximum and minimum amount I can deposit in a Tax-saving FD?

Typically, one can commence with a nominal sum, such as ₹100. The maximum amount that can be claimed for a deduction under Section 80C is ₹1.5 lakhs annually.

Do senior citizens receive an extra interest rate on Tax-saving FDs?

Indeed, senior citizens generally enjoy a higher interest rate than the standard deposit rates.

Is the interest earned on Tax-saving FDs exempted from tax?

No, the interest generated from Tax-saving FDs is taxable. Only the primary amount you deposit is eligible for a tax deduction under Section 80C.

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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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