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SBI Tax Saver Fixed Deposit

Tax Saver Fixed Deposit is a kind of fixed deposit that allows the depositor to claim tax deduction under Section 80C of the Income Tax Act, 1961. The maximum deduction allowed on principal investment amount under this section is Rs. 1.5 lakhs during a financial year. Such type of deposits come with a lock-in period of 5 years. The State Bank of India offers the SBI Tax Savings Scheme, 2006, through which account holders can get tax exemptions on their investments.

About SBI - Headquartered in Mumbai, the State Bank of India (SBI) Group offers a range of products and services to individuals, large corporates, commercial enterprises, public bodies and institutional customers. In terms of assets, branches, deposits, number of clients and employees, SBI is the country’s largest commercial bank. The company is committed to providing simple, responsive and innovative financial solutions.

(Note - All the information contained in this page has been sourced from the official website of the State Bank of India.)

SBI Tax Saving Fixed Deposit Scheme

Interest rates offered on retail domestic term deposits (Less than Rs. 2 crores):

(All figures in % per annum)

TenorsExisting for public w.e.f. 26.08.2019Revised for public w.e.f. 10.09.2019Existing for senior citizens w.e.f. 26.08.2019Revised for senior citizens w.e.f. 10.09.2019
5 years and up to 10 years6.256.256.756.75

Note: i) The interest rates on “SBI Tax Savings Scheme 2006 (SBITSS)” Retail Deposits and NRO deposits will be aligned, on the basis of the proposed rates for domestic retail term deposits.

ii) The interest rates will vary from time to time. Users can view the latest interest rates by selecting the "View current interest rate" link in the e-TDR/e-STDR request page.

Source: State Bank of India website

How to apply SBI Tax Saving Fixed Deposit Scheme?

Individuals meeting the eligibility criteria set out by the SBI can open a term deposit tax-saving account with the bank. For opening this deposit account, one can head to the nearest branch office of the bank (this can be found on the official website of the financial institution) and submit the relevant documents. Users can also open a tax-saving term deposit account through internet banking. To exercise this option, individuals must have internet banking username and password, as well as at least one transaction account that is mapped to the username.

SBI Tax Saver Fixed Deposit Eligibility Criteria

The eligibility criteria of SBI Tax Saving Scheme, 2006 are as follows:

  • Who can open?: Resident Indians can open this account for himself/ herself as an individual or in the capacity of the Karta of HUF, having PAN.
  • Minimum tenure: 5 years
  • Maximum tenure: 10 years
  • Minimum amount: Rs. 1,000
  • Maximum amount: Rs. 1,50,000 (in a financial year)

Premature withdrawal Not allowed prior to the expiry of five years from the date of issue

Source: State Bank of India website

Documents Required for SBI Tax Saver Fixed Deposit

Individuals who would like to open an SBI Tax Saver Fixed Deposit will have to provide their identity proof and address proof. Some of the documents that may be acceptable include - Passport, Voter's Identity Card, Driving Licence, Aadhaar Letter/Card, NREGA Card and PAN Card. Individuals are advised to contact the customer care of SBI for more information on the documents required to open the tax-saver term deposit account.

FAQs on SBI Tax Saver Fixed Deposit

What is tax-saving FD in SBI?

The tax-saving FD offered by SBI is termed as the SBI Tax Saving Scheme, 2006. Through this term deposit, individuals can claim tax deduction (up to Rs. 1.5 lakhs) on their investment. The minimum tenure of investment is 5 years, while the maximum is 10 years. A minimum amount of Rs. 1,000 is required to open the tax-saving scheme of SBI.

In case of joint accounts, can all the parties claim tax deduction?

For joint accounts, the first holder will only be eligible to claim tax deduction under Section 80C of the Income Tax Act, 1961.

What are the kinds of accounts from which one can debit an amount for the deposit?

Individuals can debit the amount from a current, savings or OD account for opening term deposit under the tax-saving scheme. The account (used for debiting) must be a valid transactional account through internet banking channel. It should not be a dormant, stopped or locked account.

Can senior citizens avail additional interest rate on tax-saving term deposits?

Yes, senior citizens can get additional interest rate in e-TDR/e-STDR under tax-saving scheme. The birth date mentioned in SBI’s records shall be considered for the purpose of age validation. The minimum days and amount applicable for additional interest for senior citizens will be in accordance with the bank's policy. For joint accounts, this benefit can be availed only when the first account-holder qualifies for this benefit.

Is it possible to take a loan against a term deposit opened under the tax-saving scheme?

No, one cannot take out a loan against a tax-saving term deposit account.

What is the lock-in period for term deposit under the tax-saving scheme?

The lock-in period applicable for term deposit under the tax-saving scheme is 5 years. Pre-mature closure of the account is not permitted during the lock-in period. After 5 years, the account-holder can close it through the home branch. In the event that the depositor passes away, his or her legal heir may pre-maturely close it through the home branch.