Fixed Deposits (FDs) have been a great investment option as they offer guaranteed returns and help you strengthen your financial future over time. Besides your general FDs, financial institutions like ICICI Bank also offer tax-saving FDs that enable you to save on your income tax payment through investments.
Tax-saving FD is a subtype of the FD that allows you to claim income tax deductions under section 80C of the Income Tax Act. Investing in this financial product can claim an income tax deduction of up to Rs 1.5 lakh per annum.
So, the question now is, how can you start investing here? Well, let’s find out.
How to open a tax-saving FD with ICICI Bank?
With the introduction of online banking services, investing in an FD has become easier than ever. So, here is a detailed guide on how you can invest in this financial product through the website and mobile app of ICICI Bank.
Using the website
- First, you need to go to the official website of the ICICI Bank and go to the ‘Invest’ option on the home page.
- After that, you need to select a tax-saving FD from the drop-down menu.
- Once clicked, it will take you to the next page, where you will find the option of ‘Open Tax-Saver FD now’.
- After you click on it, you need to log in to your net-banking account.
- Once you complete that, you need to complete the fundamentals of opening the deposit, which includes selecting the deposit amount, the tenure, the interest payout option etc.
- After you complete all these, you need to check the ‘I Agree’ box and then continue to create an FD.
- After that, you need to submit the required paperwork to finally complete this process.
Once you complete all these steps, you will receive a notification confirming your FD investment via your registered contact details.
Using the mobile app
- You can also use the mobile banking application to invest in a tax-saving FD. For that, you need to download and install the mobile app if you do not have it already.
- After that, you must complete the login process and select the ‘Account and Deposits’ option.
- After that, you need to fill in your deposit details: deposit amount, tenure, payout option, etc.
- After that, you must submit the application and the required documents.
As you complete these steps, you will get confirmation of your FD investment through your registered contact details.
So, this is an overview of how you can open a tax-saver FD with ICICI Bank online. But, if you want to complete this process offline, you need to visit a branch of the ICICI Bank.
Documentation required to open a tax-saving FD with the ICICI Bank
To open a FD with the ICICI Bank, you need to submit your ID and address proof, which will include the following –
- Driving Licence
- Aadhaar Card
- Voter ID card
- NREGA-issued Job card issued
- Letter from the National Population Register
Now, if the address mentioned in the documents mentioned above is not your present communication address, then you need to submit the following –
- Utility bills that are not older than 2 months
- Property tax bill issued by the municipality that is not older than 1 year
- Letter of allotment from the employer
- Rent or lease agreement
Hopefully, now you have an idea of what you need to do to invest in an FD to save income tax. But, before moving ahead, you need to know the features of this investment option.
Benefits of a tax-saving FD from ICICI Bank
Here are the highlighting benefits of an FD from the ICICI Bank –
- Dual benefits: With a tax-saver FD, you get to enjoy double benefits; you can save on paying taxes and earn handsome interest on the deposit that helps in wealth creation.
- Small investment amount: The investment amount of a tax-saving FD from the ICICI Bank starts as low as Rs 10,000.
- Multiple investment payout options: With tax-saving FDs, you can now enjoy different interest payout options, including monthly, quarterly or reinvestment in the principal amount.
- Assured return: Now, this goes without saying that FDs are the most secure investment option. Since they are not affected by the market movement, you get assured returns.
Things to remember before investing in a tax-saver FD
Knowing the benefits is not enough when planning to invest in a tax-saving FD. So, you need to know a few more things before starting, and they are –
- Lock-in period: The minimum lock-in period of these fixed deposits is 5 years, but you can exceed it as per your preference.
- No auto-renewal: With ICICI Bank, you will not get the auto-renewal facility on the tax-saving FD. However, this facility is available with regular FDs.
- No premature withdrawal: You cannot withdraw the funds invested in a tax-saving FD before the tenure ends; the funds are locked for 5 years and only available after that. However, if you go ahead with the process, you must return the tax benefits earned through it in your subsequent ITR filing.
- Interest earned is taxable: The interest you earn on this deposit is taxable. So, keep that in mind while investing.
To sum up, tax-saving FDs offer an excellent chance to save taxes while earning a handsome return. Moreover, FDs being a secure investment option; you are not taxing unnecessary risks with your investment, which ensures your financial future. You must read through all the terms of the deposit and then decide.