FD investors are in luck, these banks are offering excellent returns

High FD Rate: If you’re looking to invest in a place where risk is low and returns are guaranteed, fixed deposits (FDs) are proving to be an excellent option. Many banks are offering up to 7.4 percent interest on 1-year FDs for general customers, which is considered quite attractive in the current market conditions. Given the uncertainty in the stock market, FDs offer stable returns while keeping your money safe.

Which banks are offering the highest interest rates?

Some small finance banks are still offering the best interest rates on short-term FDs, even 1-year FDs. Among them, Suryoday Small Finance Bank offers up to 7.4 percent interest on 1-year fixed deposits, which is considered among the highest rates at the moment. Additionally, Jana Small Finance Bank is offering 7.25 percent interest on 1-year FDs. Ujjivan Small Finance Bank is also offering 7.25 percent returns on 1-year FDs. FDs up to a maximum of Rs 3 crore can be made in all these banks.

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When is TDS deducted on FDs?

People often assume that FD interest is always taxable, but this is not true. Banks deduct TDS only when the total interest earned from all FDs in a single bank exceeds Rs 1 lakh in a year. TDS is not an additional tax. It can be adjusted when filing your income tax return or a refund can be obtained if needed.

Can TDS be saved using Form 15G?

Yes, it can be saved, but two conditions must be met. First, your total tax liability must be zero. Second, the income on which you wish to be exempt from TDS must be within the basic exemption limit of your tax system.

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What is the basic exemption limit?

In the old tax system, income up to Rs 250,000 was not taxable. In the new tax system, this limit has been increased to Rs 400,000.

For example, if your tax liability is nil, but your FD interest exceeds Rs 4 lakh, you won’t be able to file Form 15G even if you choose the new tax regime. Experts say that simply having a nil tax liability isn’t enough. Both conditions must be met to file Form 15G.