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Section 80C deduction, 5-year lock, guaranteed returns
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Tax-Saver FD is a government-approved bank FD product with a mandatory 5-year lock-in, offering two tax benefits: (1) Full investment amount qualifies for Section 80C deduction (reducing taxable income), and (2) Interest earned is taxed post-maturity rather than annually. Guaranteed returns range from 5.5-6.5% p.a., lower than regular FDs but acceptable given tax benefits. Unlike mutual funds (ELSS: 3-year lock, volatile returns but higher growth potential), Tax-Saver FDs offer certainty: you know exact maturity amount. On ₹1.5L investment at 6% for 5 years: saves ₹45K in immediate tax (at 30% slab) + earns ~₹48K interest, net benefit ~₹25-30K. Not as high-returning as equities or ELSS, but provides guaranteed growth with tax-efficient deduction. Many conservative investors and those averse to market volatility prefer Tax-Saver FDs for their Section 80C allocation, especially if they've already maxed out PPF or NPS options.
A = P × (1 + r/n)^(n×t)Where:
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This calculator is provided for informational and educational purposes only. While we strive for accuracy, results should be verified with official sources or by consulting qualified professionals. Tax laws, rates, and regulations are subject to change. GotRedFlags is not responsible for financial decisions made based on these tools.