Plan your investment
What Our Plans Cover
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A five-year deposit qualifying und...
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Cumulative or periodic interest pa...
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Senior citizen rate where applicab...
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Nomination facility
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Joint holding
Who Can Consider This Plan?
- Indian resident individual, HUF, trust, firm or company
- NRIs, through NRE, NRO or FCNR deposits
- Minors, through a guardian
- PAN, required to avoid a higher rate of tax deduction at source
- Completed KYC with the institution
What May Not Be Covered?
- Any deduction under the new tax regime
- Premature withdrawal, under any circumstances
- Loan or overdraft against the deposit
- Pledging the deposit as security
- Tax exemption on the interest, which is fully taxable
Always check the policy wording before you commit.
Why Choose Wealth & Covers?
- Expert advice to choose the right plan
- Plans from leading investments companies
- Hassle-free process and documentation
- End-to-end support, including claim assistance
- Dedicated relationship manager
- Expert Guidance Personalised advice from experienced investments professionals.
- End-to-End Support From choosing the right plan to claim assistance, we are with you always.
- Claims Assistance Hassle-free claim support to ensure you get what you deserve.
- Transparent Process Clear information, easy documentation and a hassle-free experience.
Overview
A tax-saving fixed deposit qualifies for deduction under Section 80C, with a mandatory five-year lock-in. It is the most conservative 80C option available and, for a saver who will not tolerate market risk, a legitimate one.
Its limitations are worth stating plainly. The lock-in is absolute — no premature withdrawal, no loan against it, no pledging under any circumstances. And while the investment qualifies for a deduction, the interest earned remains fully taxable at your slab rate every year.
Compared with the alternatives within 80C, it sits at the conservative end. ELSS carries a three-year lock-in with equity exposure; PPF runs fifteen years with tax-free interest. The tax-saving deposit is between them on lock-in and behind both on after-tax return, which is the trade for its simplicity and certainty.
Who should consider it
Taxpayers under the old regime with 80C headroom who will not accept market risk. Savers who want certainty of amount and are willing to accept a modest after-tax return for it.
Under the new tax regime there is no 80C deduction, which removes the reason to accept the lock-in entirely.
Benefits
- Qualifies for deduction under Section 80C
- No market risk — the return is contractual
- Senior citizens receive the additional rate
- DICGC insurance to ₹5 lakh per depositor per bank
- Minimum investment as low as ₹1,000 at most banks
- The simplest 80C option to understand and execute
What is included, and what is not
Read the right-hand column first. It is the one that tends to surprise people later.
Included
- A five-year deposit qualifying under Section 80C
- Cumulative or periodic interest payout
- Senior citizen rate where applicable
- Nomination facility
- Joint holding, with the deduction available to the first holder
Not included
- Any deduction under the new tax regime
- Premature withdrawal, under any circumstances
- Loan or overdraft against the deposit
- Pledging the deposit as security
- Tax exemption on the interest, which is fully taxable
Terms vary between providers and between plans from the same provider. The offer document you receive is what governs — we will walk you through it before you commit.
How it works with us
- 1 We work out what the deposit is actually for An emergency fund, a dated obligation, or long-term savings. Only the first two are really jobs for a deposit.
- 2 Rates compared across banks, small finance banks and corporates The spread is wider than most savers realise, and so is the difference in safety. We show both sides.
- 3 Tenure and payout structured around your tax position Cumulative or non-cumulative changes when the tax falls due. For some savers that matters more than the rate.
- 4 Opened, with nomination and Form 15G/H handled The two administrative steps savers skip and later regret. We complete both at opening.
- 5 Maturity tracked, and reinvestment decided deliberately Auto-renewal at whatever rate happens to prevail is a decision by default. We flag maturities so it is a decision by choice.
Important considerations
The things a brochure tends to leave out. Read these before you decide.
- Under the new tax regime there is no 80C deduction. If you have moved to it, an ordinary deposit gives you the same return with full liquidity.
- The lock-in is stricter than any other 80C option. No withdrawal, no loan, no pledge — not even in an emergency.
- The deduction is on the investment; the interest remains fully taxable annually. That distinction is routinely misunderstood and it reduces the effective return considerably.
- Compare against PPF and ELSS on after-tax terms. PPF interest is tax-free and ELSS has a shorter lock-in with equity exposure; this sits behind both on return.
- Check your remaining 80C headroom first. Provident fund and home loan principal often fill most of it already.
Documents required
- PAN card
- Identity proof — Aadhaar, passport or voter ID
- Address proof
- Recent passport-size photograph
- Existing bank account details, where opening with your own bank
- Form 15G or 15H, where applicable, to avoid tax deduction at source
- Nomination form
Frequently Asked Questions
Is the interest tax-free?
No, and this is the most common misunderstanding about the product. The investment qualifies for a Section 80C deduction; the interest it earns is fully taxable at your slab rate every year. That materially reduces the effective return compared with PPF, where interest is exempt.
Can I withdraw in an emergency?
No. The five-year lock-in is absolute — no premature withdrawal, no loan against the deposit and no pledging it as security. It is the least flexible of the common 80C options.
How does it compare with PPF and ELSS?
PPF locks for fifteen years but pays tax-free interest. ELSS locks for three years with equity exposure and equity taxation. The tax-saving deposit sits between them on lock-in and behind both on after-tax return, and its advantage is certainty and simplicity.
Is it worth it under the new tax regime?
No. Section 80C is not available under the new regime, which removes the only reason to accept the lock-in. An ordinary deposit gives the same return with full liquidity.
Can I claim the deduction on a joint deposit?
The deduction is available to the first holder only. If both holders want to claim under 80C, they need separate deposits in their own names.
Want a shortlist instead of a catalogue?
Tell us the situation and an advisor comes back with two or three options that actually fit — and names what each one gives up.