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Tax-saving fixed deposit schemes qualify for tax deduction under Section 80C of Income Tax Act. As tax saving FDs have fixed interest rate, which remains unchanged throughout its tenure, it offers greater income certainty for those with low risk appetite. Tax saving FDs have a lock-in period of 5 years and therefore, cannot be withdrawn before maturity. Just like most FD schemes, banks usually offer higher FD interest rates in tax saving FDs to senior citizens.
Top 10 Tax Saving FD Interest Rates in India – 2026
| Banks | Tax Saver FD Interest Rates (p.a.) |
|
| General Citizens | Senior Citizens | |
| Suryoday Small Finance Bank | 8.00% | 8.00% |
| Jana Small Finance Bank | 7.77% | 7.77% |
| Ujjivan Small Finance Bank | 7.20% | 7.70% |
| DCB Bank | 7.00% | 7.25% |
| SBM Bank India | 7.00% | 7.50% |
| Utkarsh Small Finance Bank | 7.00% | 7.50% |
| Capital Small Finance Bank Limited | 6.80% | 7.30% |
| AU Small Finance Bank | 6.75% | 7.25% |
| RBL Bank | 6.70% | 7.20% |
| IndusInd Bank | 6.65% | 7.40% |
Interest rates as of 8 January 2026
Also Know: Which bank offers the highest FD interest rate?
Book FDs at Interest rate upto 8.00% p.a
Manage all FDs in one place
No Bank A/C Required
Tax Saving FD Rates of Private Sector Banks
| Banks | Interest Rates (p.a.) | |
| General Citizens | Senior Citizens | |
| IDFC FIRST Bank | 6.60% | 7.10% |
| Jammu & Kashmir Bank | 6.60% | 7.10% |
| Karur Vysya Bank | 6.55% | 6.95% |
| ICICI Bank | 6.50% | 7.10% |
| Karnataka Bank | 6.50% | 6.90% |
| Axis Bank | 6.45% | 7.20% |
| Federal Bank | 6.40% | 6.90% |
| HDFC Bank | 6.40% | 6.90% |
| Bandhan Bank | 6.25% | 7.25% |
| Canara Bank | 6.25% | 6.75% |
Interest rates as of 8 January 2026
Also Know: How to calculate interest on a fixed deposit?
Tax Saving FD Rates of Public Sector Banks
| Banks | Interest Rates (p.a.) | |
| General Citizens | Senior Citizens | |
| Indian Overseas Bank | 6.10% | 6.60% |
| State Bank of India | 6.05% | 7.05% |
| Bank of India | 6.00% | 6.75%-6.90% |
| Central Bank of India | 6.00% | 6.50% |
| Indian Bank | 6.00% | 6.50% |
| UCO Bank | 6.00% | 6.50% |
| Punjab & Sind Bank | 5.95% | 6.45% |
| Union Bank of India | 5.90% | 6.40% |
| Bank of Maharashtra | 5.00% | 5.50% |
Interest rates as of 8 January 2026
Post Office FD Interest Rates
| Tenure | Rate of Interest (%p.a.) |
| 1 year | 6.90 |
| 2 years | 7.00 |
| 3 years | 7.10 |
| 5 years | 7.50 |
FD rates are effective till 31st December 2025
Know more about the Post Office FD Schemes.
Features of Tax Saving FD
- Minimum deposit amount: Rs 100 and in the multiples of Rs 100
- Maximum deposit amount: Rs 1.5 lakh in a financial year
- Lock-in period: 5 years
- Higher interest rates for senior citizens usually by 0.5%
- Flexible interest pay out – monthly, quarterly or reinvestment in principal
- In the case of joint deposits, the tax benefit under 80C will be available only to the first holder of the deposit
- Premature withdrawal and auto-renewal facilities are not available
- Interest earned is taxable as per the tax slab of the investor
Eligibility Requirements for Opening Tax Saving Fixed Deposit Account
- Resident individuals
- Hindu Undivided Families
Documents Required for Opening Tax Saving FD Account
Depositors planning to book FD in the bank where they have a savings account or current account simply need to:
- log in to their bank’s net banking or mobile banking platforms to open their fixed deposit account right away, or;
- visit the branch, fill the form to book an FD
Depositors who are not bank customers will have to submit the following KYC documents:
- Proof of Identity (Aadhaar Card, Driving License, Passport, etc.)
- Proof of Residence (Aadhaar Card, Utility Bills, Ration Card, Voter ID Card, Driving License, Passport, etc.)
- Proof of Signature (Passport or Driving License)
- Passport size photographs