When it comes to personal finance, securing the future and saving taxes are crucial. One effective option that combines these goals is the ICICI Bank tax saving fixed deposit. These deposits provide a secure way to grow savings while offering tax benefits. This comprehensive guide will explore the features of the ICICI Bank tax saving fixed deposit, including interest rates, eligibility criteria, and the account opening process. Whether experienced in investing or just starting on a financial journey, join us as we uncover the advantages and details of this tax-saving solution offered by ICICI Bank.
About ICICI Bank Tax Saving Fixed Deposit
The ICICI Tax Saver FD is a fixed deposit account specifically designed to offer tax benefits under Section 80C of the Income Tax Act of 1961. Investing in this Tax Saver FD within a financial year allows one to avail deductions up to Rs 1.5 lakh. This special tax saving fixed deposit in ICICI bank comes with fixed interest rates for the entire five-year term. Like regular FDs, they provide flexible interest payout options such as monthly, quarterly, or periodic payments. Additionally, senior citizens are eligible for preferential interest rates on these Tax Saver FDs.
ICICI Bank Tax Saving FD Interest Rates
Depositor | ICICI Bank Tax Saving FD Interest Rate |
General Citizens | 7.0% |
Senior Citizens | 7.5% |
Key Attributes of ICICI Bank Tax Saving Fixed Deposit
- ICICI Bank Tax Saving FD Interest Rate for 5 years: ICICI Tax-Saving FDs have a mandatory lock-in period of 5 years.
- Tax Benefits: These fixed deposits offer tax-saving advantages of up to ₹1,50,000 annually under Section 80C of the Income Tax Act.
- Taxation of Interest Income: Interest earned on ICICI Fixed Deposits is subject to taxation based on the income tax slab rates. However, one can avail a deduction of up to ₹40,000 per year on the interest income under Section 80 TTB of the Income Tax Act. For senior citizens, the deduction limit is ₹50,000 per year.
- TDS (Tax Deducted at Source): According to Section 194A of the Income Tax Act, ICICI Bank deducts TDS at 10% on the interest income its customers earn from fixed deposits. If a customer fails to provide PAN Card details to the bank, the TDS rate increases to 20%.
- Non-premature Withdrawal: It’s important to note that all banks and services maintain a consistent feature for tax-saving FDs, which is the inability to withdraw funds from the FD before the completion of the 5-year maturity period, regardless of the circumstances.
Eligibility Requirements for ICICI Bank Tax Saving Fixed Deposit Scheme
Individuals and Hindu Undivided Families (HUFs) Eligible
- Both individual taxpayers and Hindu Undivided Families (HUFs) meet the eligibility criteria to invest in tax-saving fixed deposit schemes.
Choice of Banks for Tax-Saving Deposits
- Tax-saving fixed deposits can be availed from public or private sector banks for tax savings.
- Please note that cooperative and rural banks are not eligible for this.
Post Office 5-Year Term Deposit as a Tax-Saving Option
- Individuals looking to save on taxes can also opt for a 5-year term deposit in a post office, recognised as a tax-saving instrument.
Individual and Joint Account Deposits
- Depositors can make deposits individually or in a joint account.
- It’s important to note that only the first account holder in a joint account is eligible for the associated tax benefits.
Document Requirements for ICICI Bank Tax Saving Fixed Deposit Scheme
Identity Verification
The documents accepted as an identity proof are as follows:
- Verification of Full Aadhaar Number: An Aadhaar card or any document that proves the possession of a complete Aadhaar number is accepted for identity and address verification.
- Passport: A passport is an internationally recognised identification document that confirms an individual’s nationality and identity.
- Driver’s Licence: A valid driver’s licence serves as a widely accepted form of identity proof that showcases a person’s identity and ability to drive.
- Voter ID Card: A Voter ID card is an accepted proof of identity and address verification.
- Job Card issued by NREGA, signed by a State Government Officer: If one has a job card issued under NREGA and a State Government Officer signs it, one can use it as proof of identity and address.
- Letter from the National Population Register: A letter from the National Population Register is accepted as a valid document for identity and address verification.
Address Verification
Some examples of accepted address proofs include:
- Municipal Tax Statement or Property Tax Invoice (Less than 1 year old): A property tax bill or municipal tax receipt, dated no older than one year, serves as a valid proof of address.
- Utility Bills (No more than 60 days old): Utility bills, such as electricity or water bills, are valid address proofs that confirm the individual’s residency at a particular location.
- Official Housing Allotment Letters from Government and Recognised Entities: A letter of allocation for housing provided by the State or Central Government, accredited commercial banks, financial institutions, regulatory agencies, public sector entities, or publicly traded corporations.
- Inclusion of Customer Name in Leave and Licence Agreement: To ensure a smooth process, it’s important to complete a Leave and Licence agreement with one of the employers listed. Make sure that the agreement clearly states the customer’s name as the employee.
- Address Inclusion in Pension Payment Orders for Retired Employees: If one has personal or family pension payment orders from government departments or public sector undertakings that include the necessary address information, they must include them as well.
Process of Opening Tax Saving Fixed Deposit in ICICI Bank
Opening an ICICI Tax Saving Fixed Deposit can be done through internet banking, mobile banking, or visiting an ICICI Bank branch.
Internet Banking:
- If one is an existing ICICI Bank customer, access Internet Banking.
- Navigate to the ‘Customer Service’ section.
- Click on ‘Service Request’ and select ‘Category: Deposits.’
- Choose ‘Open Standard Fixed Deposit,’ and the FD account will be activated promptly.
iMobile App:
- Existing ICICI Bank customers can log in to the ICICI Bank iMobile app.
- Select the ‘Account & Deposits’ icon.
- Click on ‘Deposits’ and access the ‘Open FD’ section to initiate the process.
Customer Care:
- Existing customers can also contact ICICI Customer Care at 1800 1080 from their registered mobile number.
- Customer service is available between 7:00 a.m. and 9:00 p.m.
ICICI Bank Branch:
- New customers interested in opening a Tax Saver FD can visit an ICICI Bank branch.
- For further information, please refer to the bank’s website.
Benefits of Fixed Deposit Tax Saving ICICI Bank
- Ease of Entry: New investors can kick start their investment journey with a minimal sum as low as Rs. 10,000.
- Nomination Flexibility: Whether the account is held solely or jointly, one can designate a nominee by fulfilling the necessary paperwork per the Banking Companies Act.
- Shortest Lock-In Period: With a mere five-year lock-in duration, this FD boasts one of the briefest waiting periods, during which early fund withdrawals are not permitted.
- Guaranteed Returns: Unlike riskier financial products where returns are subject to market fluctuations, this FD offers consistent and reliable returns at a competitive interest rate.
- Tax Advantages: Additionally, one can avail of tax deductions of up to Rs. 1.5 lakh under Section 80C, providing added financial benefits.
Conclusion
ICICI Bank Tax Saving Fixed Deposit is a beneficial financial tool that ensures future security and offers attractive tax-saving advantages. This tax-saving FD provides ease of entry with a low initial investment of just Rs. 10,000, ensuring that new and experienced investors benefit. Opening an ICICI Bank Tax Saving Fixed Deposit can help one enjoy these advantages and take a confident step towards a more financially secure tomorrow.
ICICI Bank Tax Saving Fixed Deposit FAQ’s :-
Upon maturity of a Tax Saving FD, individuals can visit any ICICI Bank branch nationwide to access their deposit. They can simply present their Fixed Deposit receipt or Memorandum of Deposit to initiate the redemption process.
Tax Saver Fixed Deposits require a minimum investment of ₹10,000, and the maximum allowable investment in a single year is ₹1.5 lakh.
For the Traditional scheme, the interest earned on the fixed deposit account will be deposited into the savings account one has designated every month or every quarter. In the case of the reinvestment scheme, interest is compounded quarterly and added to the principal amount. However, the total interest will only be credited to the FD upon maturity.
To initiate an ICICI Bank Tax-Saver FD, one must make a minimum deposit of Rs. 10,000.
The Tax-Saver FD scheme does not offer automatic renewal, as per government regulations.