Tax Saving FD may Reduce to 3 Years in Budget in India

The decision of the banks to reduce the tax-saving FD tenor to 3 years will enable you to avail the tax benefits even with a shorter tenor. Earlier, only ELSS (Equity Linked Savings Scheme) gave the option of saving taxes of up to Rs. 1,50,000 with a 3-year tenor. ELSS usually generates a higher income but as it is a mutual funds scheme, it also comes with its set of risks.

The FD interest rate offered by tax-saving FD schemes varies from bank to bank. As the bank FD rates today are low, your deposits won’t be able to fetch higher returns. Instead, you can invest in company FDs like Bajaj Finance FD and reap high interest income along with many other features.

Bajaj Finance FD also allows you to invest in multiple FD plans using the same paycheque. The multi-deposit facility enables you to pick a different tenor and FD type for each of your deposits. This enables you to ladder your deposits for enjoying a higher liquidity. Also, by investing in multiple FDs, you will have the alternative to reinvest the returns at a higher interest rate in the future.

Also Read: Tenure for Tax Saving FD may Reduce to 3 Years in Budget 2022