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    SBI tax savings scheme: Eligibility, investment limits, interest rates, other details

    SBI tax savings scheme: Eligibility, investment limits, interest rates, other details

    SBI tax savings scheme: Eligibility, investment limits, interest rates, other details
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    By Anshul   IST (Updated)

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    State Bank of India (SBI), the country's largest lender, offers income tax benefits under a special type of fixed deposit (FD) scheme.

    State Bank of India (SBI), the country's largest lender, offers income tax benefits under a special type of fixed deposit (FD) scheme. This scheme, also known as a tax savings scheme, allows investors to avail income tax benefit against their investment—up to Rs 1.5 lakh in a financial year- under Section 80C of the Income Tax Act.
    Here are the key things to know about the SBI tax savings scheme:
    Eligibility
    Resident Indians for himself/ herself as an individual or in the capacity of the Karta of the Hindu undivided family, having Income Tax Permanent Account Number (PAN) can open tax savings FD account with SBI.
    Tenure
    This special type of fixed deposit allows a minimum maturity period of five years and a maximum of 10 years, according to SBI.
    Investment limits
    The minimum deposit amount that can be invested in the tax savings scheme is Rs 1,000 and in multiples of Rs 100 thereafter. The maximum deposit amount should not exceed Rs 1,50,000 in a year.
    Interest rate
    The rate of interest is the same as applicable to term deposits. The interest rate payable to SBI staff and SBI pensioners is 1 percent above the applicable rate. The rate applicable to all senior citizens of age 60 years and above is 0.50 percent above the applicable rate.
    Premature withdrawal/closure
    The loan facility is not available during the lock in period of five years. After completion of 5 years, premature closure is allowed as per terms and conditions applicable to a term deposit.
    In case of the death of the account holder, the nominee/legal heirs can withdraw the deposit any time before or after maturity.
    In case of the death of the first account holder in a joint account, the other holder is entitled to withdraw the deposit before its maturity. The bank pays interest at the rate applicable for the period deposit has run without any penalty, according to SBI.
    Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
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