Fixed Deposits · 5 year · 80C
5-Year Tax-Saver Fixed Deposits
The 5-year tax-saver FD is the only FD eligible for Section 80C deduction (up to ₹1.5 lakh per FY, old regime only). Lock-in is hard — premature withdrawal NOT allowed. Top rates 7.0-7.75% for general public, +0.5-0.75% for senior citizens. Best for 80C-saturation-seekers in the 30% tax bracket who want capital safety.
Who needs this
Old-tax-regime taxpayers in the 30% slab who have not yet maxed their ₹1.5L 80C limit via PPF/ELSS/EPF. Senior citizens wanting tax-savings plus stable returns. Conservative investors who prefer FD over ELSS for the 80C bucket.
At a glance
80C deduction
Up to ₹1.5L
Old regime only
Lock-in
5 years (hard)
Premature exit not allowed
Top rate (general)
7.75%
Small finance banks
PSU bank range
6.75-7.25%
SBI, PNB, BoB
Senior bonus
+0.5-0.75%
Standard
Tax on interest
Slab rate
Even though principal got 80C
Top banks — 5 year · 80C
Source: bank rate cards · verified FY26 Q1
| Bank | Type | General % | Senior % |
|---|---|---|---|
AU Small Finance Bank | SFB | 7.75% | 8.50% |
Unity Small Finance Bank | SFB | 7.50% | 8.00% |
IDFC First Bank | Private | 7.25% | 7.75% |
Bank of Baroda | PSU | 7.00% | 7.50% |
Yes Bank | Private | 7.25% | 7.75% |
SBI | PSU | 6.75% | 7.50% |
Key decisions
Tax-saver FD vs ELSS — which is better for 80C?
ELSS: 3-year lock (shorter), equity returns (12-18% CAGR potential), LTCG above ₹1.25L taxed at 12.5%. Tax-saver FD: 5-year lock (longer), fixed 6.75-7.75% return, full interest taxed at slab. For 30% slab investor: ELSS usually wins on post-tax return over 7+ years; tax-saver FD wins on certainty. Most advisors recommend at least some ELSS in the 80C mix.
Tax-saver FD vs PPF for 80C?
PPF: 15-year lock, EEE (exempt-exempt-exempt) tax status, 7.1% sovereign-backed. Tax-saver FD: 5-year lock, interest taxable. PPF is structurally better for tax efficiency over the full 15 years; tax-saver FD is for those who want the 5-year flexibility, accept slab tax on interest, and don't have PPF capacity remaining.
Can I have multiple tax-saver FDs?
Yes — total 80C deduction is still capped at ₹1.5L/yr aggregated across all 80C instruments (PPF + ELSS + EPF + tax-saver FD + ULIP + premium + tuition fee + home-loan principal). Multiple tax-saver FDs across banks is fine for diversifying DICGC exposure beyond ₹5L per bank.
Related articles
Useful calculators
Regulatory notes — RBI / DICGC / IT Act
- Tax-saver FD eligible under Section 80C up to ₹1.5L/FY — only in the OLD tax regime. New regime doesn't allow 80C.
- 5-year lock-in is mandated by Bank Term Deposit Scheme 2006 — premature withdrawal not permitted.
- Interest is fully taxable at slab rate, even though principal got 80C benefit. TDS 10% applies if interest > ₹40K/yr.
- DICGC insurance covers up to ₹5 lakh per depositor per bank.