Tax saving FDs, an attractive option.

For those of you waiting to choose an investment option for tax saving under sec 80 c ( 1 lakh investment limit) , Tax Saving FDs are a compelling option now.

Investment in ELSS funds (Tax saving equity linked mutual funds offered by mutual funds) remains the most attractive option for those who are willing to take risks.

ELSS Advantage

For the investors who are not willing to invest in stocks, Tax saving FDs offered by banks seems to be the best option. Interest rates are offered up to 9.5% on such deposits with a five year lock in period. These deposits score over NSC because of the higher interest rate and a shorter lock-in period.

NSC vs. PPF

Comparing the FDs with PPF, FDs score over in terms of interest rate and lock-in period. But PPF fares better in one sense because the interest you earn on a PPF account is not taxable.


Debt Funds , FMP vs  FD


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2 comments:

Anonymous said...

Hi. thanks for the details but are there no FDs with a lower lock-in eperiod of three years?

Ideasmoney said...

Lesser lock in period FDs not eligible for tax exemption

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