State Bank of India (SBI) offers a type of fixed deposit or term deposit scheme called the SBI Tax Savings Scheme, 2006. Resident Indians as an individual or in the capacity of the Karta of the Hindu Undivided Family, are eligible to avail the benefits of this scheme, said the country’s largest bank on its website, sbi.co.in. One also needs to have income tax Permanent Account Number (PAN), said the bank. SBI’s Tax Savings Scheme offers tax benefits of up to Rs. 1.5 lakh under Section 80C of Income Tax Act.
Here are 5 things you need to know about SBI’s Tax Savings Scheme, 2006:
1. Amount: Customers need to deposit a minimum of Rs. 1,000 or in multiples thereof whereas the maximum deposit should not exceed Rs. 1,50,000 in a year.
2. Tenure: The minimum tenure for SBI Tax Savings Scheme, 2006, is five years which can go up to a maximum of 10 years, according to SBI.
3. Rate of Interest: The rate of interest for the savings scheme is similar to that on term deposits. The interest rates for retail domestic term deposits below Rs. 1 crore is 6.85 per cent for general public and 7.35 per cent for senior citizens in maturity period of 5 years and up to 10 years.
4. Premature withdrawal: Customers cannot withdraw the term deposit before the expiry of five years from the date of its receipt, said SBI.
5. Other facilities: A nomination facility is also available with SBI’s Tax Savings Scheme. However, customers investing in the scheme cannot use the term deposit account to secure loan or as security to any other asset.