Bharat Cooperative Bank

The Bharat Cooperative Bank's Bharat Cooperative Tax Benefit Scheme is offering an interest rate of 7.75 per cent to general public whereas senior citizen will get 7.9% on a deposit amount upto Rs. 1 lakh.

Tax savings FD from the banks qualifies for tax rebate under Section 80C of the Income Tax Act. The Bank is a multi-state scheduled bank.

It is important to note that these tax saving FDs have a lock-in period of 5 years and there is no way one can withdraw the deposit.

RBL Bank

RBL Bank offers an interest rate of 7.20 per cent on its tax saving Bank FDs, which are for a tenure of 5 years.

The bank has cut interest rates on its deposits, in line with most other banks. An important thing that investors should remember is that if interest rates in the economy start climbing, you would be stuck with low interest rates and you cannot even break your 5-year tax deposit.

Abhyudaya Cooperative Bank

Abhyudaya Tax Saving Scheme (ATSS) is offering an interest rate of 7 per cent per annum.

The deposit has a lock-in of 5 years, as is the case with all tax saving FDs from banks. An investor can claim deduction of the investment amount upto Rs. 1.5 lakh in a financial year from his total taxable income as per section 80C.

The bank like many cooperative banks, may not have branches in all cities of India. One will have to check for the online option before investing.

Development Credit Bank

The Mumbai based Development Credit Bank (DCB) is offering an interest rate of 7.25% with a facility of quarterly compounding or quarterly interest payment option.

Senior citizen will get 7.75% on the investment on an annual basis. Investment as low as Rs. 10,000 can be made upto a maximum of Rs. 1,50,000 in a financial year. It is to be noted that the tax-saving FD cannot be given as collateral to avail loan.

IDFC Bank

Tax saving fixed deposit of IDFC Bank offers an interest rate of 7.2% for deposit amount less than 1 crore.

This is more or less in line with what most cooperative banks are offering, but, much higher than some of the private or government owned banks in the country.

Not a bad bet as the interest rates are reasonable. However, as there is a lock-in period of 5 years, you maybe trapped if interest rates were to rise

Yes Bank

Tax-free fixed deposit scheme of Yes Bank offers interest rate which is 6.92 per cent. An additional 0.50% interest is payable to senior citizens.

Like almost all other banks, interest rates have been very low for deposits, including the long and short term duration. An important thing to note is that while you get Sec 80C benefits, interest rates on these deposits are not tax free in the hands of the investors.

City Union Bank

The Tamil Nadu based City Union Bank is offering an interest rate of 6.7 per cent on its tax savings deposit for deposit amount upto Rs. 1 lakh.