Saraswat Bank Tax Saving Fixed Deposit

Updated on: Oct 4th, 2023

Fixed Deposits (FDs) remain a stalwart for their safety and predictable returns in the vast spectrum of investment options. Among them, the Madhukar Tax Saving FDs by Saraswat Bank stand out, offering financial growth and significant tax benefits.

Established as a part of Saraswat Bank's commitment to its customers, these FDs allow investors to harness deductions under Section 80C of the Income Tax Act, 1961. With a mandatory lock-in period of five years, they ensure disciplined savings while providing tax relief. Understand how this unique FD variant can boost your financial strategy.

Madhukar Tax Saving FD Features

Duration: The deposit has a fixed tenure and lock-in period of 5 years, ensuring your funds remain invested.

Interest Offerings: These FDs boast competitive interest rates. In some institutions, senior citizens may enjoy an additional rate increment.

Interest Disbursement: Interest on the deposit is payable quarterly on a quarterly rest. There may be other payout options available, like monthly or annual intervals. Some banks also offer the reinvestment of earned interest.

Investment Range: The minimum deposit to initiate a tax-saving FD is INR 5,000, with an upper threshold limit of INR 1,50,000 per annum. This aligns with the Section 80C guidelines.

Tax Benefits: The primary account holder can avail tax deductions up to INR 1,50,000 per annum under Section 80C of the Income Tax Act, 1961, in the first year of investment.

Nomination: A nomination facility is available, ensuring the designated individual can claim the deposit in case of unforeseen circumstances.

Withdrawal Restrictions: Premature withdrawals are not permissible before the 5-year lock-in period. Any withdrawals post this period but before FD maturity may be subject to penalties or terms and conditions.

Borrowing against FD: These specific FDs are not available for use as collateral for loans due to their fixed tenure.

Tax Deduction at Source (TDS): TDS will be applicable if the interest income exceeds certain limits, as governed by sections 194A or 195 of the Income Tax Act, 1961.

Joint Deposits: The FD can be held in a single name or jointly. However, tax benefits under Section 80C are limited to the first holder.

Renewal Policy: At maturity, the FDs can be automatically renewed for the same tenure unless specified otherwise, and the interest rate applied would be as per prevailing rates.

Eligibility Criteria for Opening a Tax-Saver FD

  • Resident Individuals: Any individual who is a resident of India can open a Tax-saving FD with Saraswat Bank.
  • Hindu Undivided Families (HUF): The Karta of the HUF can open a Tax-saving FD on behalf of the family.
  • Minors: Minors can open an FD through a guardian.
  • Single or Joint Accounts: Both single and joint accounts can be opened. However, the tax benefit under section 80C is usually available only to the first account holder for joint accounts.
  • Existing Saraswat Bank Customers: Existing customers may find it easier to open a Tax-saving FD, especially online, given that their KYC details are already available with the bank. New customers might need to go through the full KYC process.
  • Amount: The minimum amount for investment typically starts from ₹5,000 but can go up to a maximum of ₹1.5 lakhs in a financial year to avail the 80C benefit.

Documents required for Saraswat Bank FD account

If you are not a prior customer or account holder in Saraswat Bank, here are some documents you must submit.

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 should not be more than 3 months old)


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

Typically, you can start with a minimum amount, such as ₹100. The maximum amount that qualifies for a deduction under Section 80C is ₹1.5 lakhs in a financial year.

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

Senior citizens are generally offered a higher interest rate than regular deposit rates.

Is the interest earned on Tax-saving FDs tax-free?

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

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