SBI Tax Savings Fixed Deposit Account: How It Works, Interest Rates And Other Details

State Bank of India (SBI), the largest lender of the country, offers a type of fixed deposit or term deposit scheme called the SBI Tax Savings Scheme, 2006. Resident Indians as an individual or in the capacity of the Karta of the Hindu Undivided Family, having income tax Permanent Account Number (PAN) are eligible to avail the benefits of this scheme, according to the bank's website -- sbi.co.in. SBI's Tax Savings Scheme offers tax benefits of up to Rs. 1.5 lakh under Section 80C of Income Tax Act. A nomination facility is also available with the scheme.

Here's everything you need to know about SBI's Tax Savings Scheme, 2006:

Minimum Deposit: One can deposit a minimum of Rs. 1,000 or multiples thereof whereas the maximum deposit should not exceed Rs 1,50,000 in a year, said SBI.

Tenure: For SBI Tax Savings Scheme, 2006, the minimum tenure is for 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 of term deposits. The interest rates for retail domestic term deposits below Rs 1 crore is 6.85 per cent for general public and 7.35 per cent for senior citizens in maturity period of 5 years and up to 10 years.

Premature withdrawal: One cannot withdraw the term deposit before the expiry of five years from the date of its receipt.

Loan facility: People planning to invest in the savings scheme cannot use TD/STD to secure loan or as security to any other asset. However, the nomination facility is available.