SBI or State Bank of India, the country’s largest lender, offers a number of saving schemes under its personal banking portfolio. One such scheme offered by SBI is Tax Savings Scheme, 2006, which is a kind of fixed deposit or term deposit. Resident Indians as an individual or in the capacity of the Karta of the Hindu Undivided Family are eligible to invest in the scheme, according to SBI’s website, sbi.co.in. A person also needs to have income tax Permanent Account Number (PAN) to invest in this scheme.
Here are key things you need to know about SBI Tax Savings Scheme:
A person needs 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, noted SBI.
The minimum tenure for SBI Savings Scheme, 2006, is five years which can go up to a maximum of 10 years.
Rate of interest
The rate of interest for the scheme, is similar to that on fixed deposits. SBI revised its interest rates on term deposits with effect from August 26. The interest rates for retail deposits below Rs. 2 crore is 6.25 per cent for general public and 6.75 per cent for senior citizens in maturity period of 5 years to 10 years.
An investor cannot withdraw the term deposit before the expiry of five years from the date of its receipt, according to SBI’s website.
SBI’s scheme offers tax benefits up to Rs. 1.5 lakh under Section 80C of Income Tax Act 1961. A nomination facility is also available with SBI’s scheme. However, customers cannot use the term deposit account to secure loan or as security to any other asset.