Avail 8% interest rate on these tax-saving bank fixed deposits before March 31

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Avail 8% interest rate on these tax-saving bank fixed deposits before March 31 
While large banks like State Bank of India is offering 6.8% on tax-saving FDs, some private banks are offering up to 8.5% interest rate to senior citizens on these deposits
If you have not done your tax-saving investments under Section 80C for the current financial year, then you have only three days left to do so. Although you have many options to save tax under Section 80C, most of them will not be feasible in the last minute given that March 31 is a Sunday and Saturday (March 30) is a banking holiday (fourth Saturday). 
Going for an ELSS without doing proper research may be risky given that markets are near all-time highs. Also, going for an insurance scheme in the 11th hour is not advisable as it is a long term commitment. In such a scenario tax-saving fixed deposits are an attractive option if you are getting up to 8% guaranteed annual return.
Worth mentioning here is that despite falling interest rates in the economy, banks are offering up to 8% interest rate to general public and up to 8.5% to senior citizens on tax-saving fixed deposits(FD). This is because deposit growth in the economy is lagging behind loan growth. 
However, this situation is unlikely to stay for long with the government making a constant endeavour to bring lending rates lower to boost growth. 
Worth mentioning here is that last month the Reserve Bank of India slashed repo rate – the rate at which the apex bank lends money to commercial banks- by 25 basis points. According to analysts, the RBI may reduce repo rate by another 25 basis points in its April policy meeting, keeping benign inflation in the economy.
Given the fact that RBI has started cutting repo rate (key policy rate), interest rates offered by commercial banks are not going to stay at current levels. Worth mentioning here is that some state-owned banks and private banks have recently reduced their deposit rates. So it is advisable that you lock-in higher interest rates offered by banks on tax-saving fixed deposits.
While large banks like State Bank of India is offering 6.8% on tax-saving FDs, some private banks are offering up to 8.5% interest rate to senior citizens on these deposits. So it is advisable that you search for banks that offer a higher interest rate on tax-saving fixed deposits. 
In order to make the task easier for you, we have listed the banks that offer the best interest rates on 5-year tax-saving FDs.
AU Small Finance Bank is offering the highest rate of 8% on a five-year tax-saving fixed deposit to general public. If you invest Rs 10,000 in this deposit, you will get Rs 14,859 after five years at maturity. Senior citizens will get an additional 50 basis points interest in the same FD. Lakshmi Vilas Bank offers 7.85% interest rate on a five-year tax-saving FD while DCB Bank and IDFC Bank are offering 7.75% rate on these deposits.
It may be noted that tax-saving fixed deposits cannot be closed prematurely. These deposits cannot be mortgaged to avail loan. Interest earned from these deposits are taxable as per the individual tax-slab of the taxpayer.


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