Finance Desk – Fixed deposits (FDs) are one of the most secure investment options available. With this the State Bank of India (SBI), offer FDs with varying time frames such as 1-year, 2-year, and 5-year durations.
Although SBI has several FD options, but their 5-year FD stands out due to its tax benefits under Section 80C of the Income Tax Act. So consider is a smart choice for reducing your taxable income.
How Rs 5 Lakh Investment Grow?
Principal Amount: Rs 5 lakh
Interest Rate: 6.50% per annum
Duration: 5 years
If you invest Rs 5 lakh in this FD, at the end of 5 years, the interest accrued will be approximately Rs 1,90,210.
On Maturity, your initial investment plus the interest earned gives you a total of Rs 6,90,210.
Apart from the interest, the tax savings can effectively add to your gains. You fully utilize the Section 80C deduction, including the tax saved plus the interest earned, roughly adding up to around Rs 3,40,210 if you consider tax savings as a return.
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