Investing in fixed deposits (FDs) remains one of the most trusted ways to earn guaranteed returns while keeping your money secure. Among various FD types, the tax-saving FD under Section 80C of the Income Tax Act, 1961, allows individuals to reduce their taxable income while developing a habit of disciplined savings.
With digital banking simplifying investments, opening a tax-saving FD online has become faster, paperless, and more convenient. However, it’s important to note that Bajaj Finance does not offer tax-saving FDs. You can invest in regular Bajaj Finance FDs to earn higher returns and enjoy flexibility, even though they do not qualify for tax deductions under Section 80C.
Let’s understand how tax-saving FDs work and how you can open one online — along with how Bajaj Finance simplifies the FD investment experience overall.
What is a tax-saving fixed deposit?
A tax-saving fixed deposit is a special type of FD that qualifies for deductions under Section 80C of the Income Tax Act. Investors can claim up to ₹1.5 lakh per financial year as a deduction from their taxable income.
These deposits come with a mandatory five-year lock-in period, during which premature withdrawal is not allowed. The online FD facility enables investors to complete the entire process digitally from account setup to payment without visiting a branch.
Please remember: Bajaj Finance Fixed Deposits are not tax-saving FDs. They are regular FDs that offer flexible tenures (12–60 months) and attractive interest rates, but they do not qualify for Section 80C benefits.
Eligibility criteria for opening a tax-saving FD
To open a tax-saving FD, you must meet the following eligibility requirements:
- Resident Indian individuals and Hindu Undivided Families (HUFs) can apply.
- A valid PAN and a savings account with the bank or NBFC offering the deposit are required.
- Joint accounts are allowed, but only the first holder can claim the tax deduction.
- The minimum deposit amount typically starts from ₹1,000, with no upper limit on investment (tax deduction limited to ₹1.5 lakh per year).
Step-by-step process to open a tax-saving online FD
Here’s how you can open a tax-saving FD online through your bank’s digital platform:
- Visit the bank’s official website or app.
- Log in or sign up using your name, mobile number, email ID, and PAN.
- Select the ‘Tax-Saving Fixed Deposit’ option under investments.
- Enter the deposit amount, choose a five-year tenure, and select the payout type (cumulative or non-cumulative).
- Add nominee details.
- Complete Aadhaar-based OTP verification for identity confirmation.
- Make the payment via net banking, UPI, or debit card.
Once the payment is successful, you’ll receive an FD receipt digitally — which also serves as proof for your Section 80C tax deduction claim.
Documents required for a tax-saving FD
You’ll need the following documents to open a tax-saving FD and complete KYC verification:
- PAN card
- Aadhaar card
- Address proof (if different from Aadhaar)
- Passport-size photograph (for new customers)
These documents ensure compliance with regulatory norms and help you claim tax benefits during filing.
Benefits of investing in a tax-saving FD
A tax-saving FD offers:
- Guaranteed returns with zero market risk.
- Capital safety, ideal for conservative investors.
- Predictable maturity value for better financial planning.
- Easy digital access for online opening and tracking.
However, remember that interest earned on tax-saving FDs is taxable as per your income slab.
Understanding interest rates on a ₹20 lakh deposit
If you invest ₹20 lakh in FDs, your returns depend on the interest rate, tenure, and compounding option. For instance, at 7% per annum, a ₹20 lakh deposit earns about ₹1.4 lakh annually. Over five years, this can grow to around ₹28 lakh (cumulative).
However, Section 80C benefits apply only to ₹1.5 lakh of your principal amount each year. The interest remains taxable, so it’s wise to compare rates and choose issuers offering high, credible returns.
Comparison with other Section 80C investment options
Tax-saving FDs compete with other popular 80C options such as:
- Public Provident Fund (PPF) – long-term savings with tax-free returns.
- National Savings Certificate (NSC) – fixed returns with a 5-year lock-in.
- Equity Linked Savings Scheme (ELSS) – market-linked, 3-year lock-in with higher potential returns.
FDs stand out for their simplicity, guaranteed returns, and zero volatility — making them ideal for conservative investors or those nearing retirement.
How Bajaj Finance simplifies the online FD experience
While Bajaj Finance does not provide tax-saving FDs, it offers regular fixed deposits that combine high returns, flexibility, and safety — perfect for investors seeking stability and growth.
With CRISIL AAA/STABLE and ICRA AAA/STABLE ratings, Bajaj Finance FDs are among the safest in the market. You can:
- Choose tenures from 12 to 60 months
- Opt for cumulative or non-cumulative payout options
- Invest online through a simple, paperless process
- Auto-renew your FD to continue earning returns seamlessly
This makes Bajaj Finance FD an excellent option to complement your tax-saving instruments — balancing liquidity, safety, and steady growth.
Final thoughts
A tax-saving FD remains one of the simplest ways to save tax while earning guaranteed returns. However, if your goal is to earn higher interest with flexible tenure options, consider a regular Bajaj Finance FD.
While it doesn’t qualify for Section 80C deductions, it offers attractive rates, safety, and convenience, making it a smart choice to strengthen your portfolio alongside your tax-saving investments.
By combining tax-efficient products (like PPF or ELSS) with high-yield regular FDs, you can achieve a well-rounded financial plan that ensures both growth and security.
