Bank of Baroda Tax Savings Term Deposit

Bank of Baroda Tax Savings Term Deposit
Minimum Deposit Amount Rs. 100
Tenure 5 years
Maximum Deposit Amount Rs. 1,50,000

Bank of Baroda (BOB) Tax Savings Term Deposit account allows you to claim a deduction in your tax through Section 80C of the Income Tax Act. This product gives you the benefit of a traditional term deposit along with tax benefits. The tenure of the Fixed Deposit (FD) has to be of at least 5 years. You can deposit up to Rs. 1,50,000 in a financial year. The deposit amount must be at least Rs. 100. And thereafter the deposit has to be in the multiples of INR 100. You can open a single or joint account.

In this post, we will discuss Bank of Baroda Tax Saving Fixed Deposit Fixed Deposit account features, eligibility, tenure, types of accounts, interest rates, other benefits, and frequently asked questions.

Features of Bank of Baroda Tax Savings Term Deposit

Several tax-saving avenues are available in the market to cut down your income tax liabilities towards the department. Bank of Baroda has an FD Scheme that serves the same intention. Here are the features of BOB Tax Savings Fixed Deposit:

  1. Eligibility: Only individuals and HUFs (Hindu Undivided Families) are eligible to open accounts under the Bank of Baroda Tax Savings Term Deposit scheme. The scheme is meant for individuals such as salaried employees, self-employed, businessmen, etc., who are taxpayers and want to claim deduction under section 80C of the Income Tax Act. Firms, companies, clubs, corporate houses, societies, and institutions are not covered under this scheme.
  2. Amount of Deposit: The minimum amount which can be invested in this scheme is Rs. 100 and thereafter in the multiples of Rs. 100 but not exceeding a total of Rs. 1.50 lakh per year, as per the directives of the government since section 80C allows a maximum deduction of Rs. 1.5 lakh.
  3. Tenure: The investment needs to be done for a minimum of 5 years but not exceeding 10 years in total.
  4. Types of Accounts: The account can be opened in single or joint names under the Bank of Baroda Tax Savings Term Deposit scheme. The term deposit in the name of an individual is issued for the individual himself or in the name of the Karta of the HUF. A joint term deposit account under this scheme may also be allowed by the bank but as per the Government directives, the income tax benefit shall only be granted to the primary/first account holder in this scheme. A maximum of 2 individuals is allowed to operate the account jointly which can either be 2 adults or a combination of an adult and a minor.
  5. Loan Facility: No loan shall be granted against deposits under this scheme. Also, any term deposit under the Bank of Baroda Tax Savings Term Deposit scheme may not be allowed to be offered as collateral by the account holder in any other loan.
  6. TDS Guidelines: The interest is paid to the account holder taking into consideration the applicable TDS guidelines of the government. The bank will provide the TDS Certificate.

Bank of Baroda Tax Savings Term Deposit Interest Rate

BOB Tax Saving FD Interest Rate is equal to the applicable ROI for other FD (Fixed Deposit) schemes for the same tenure shall be applicable subject to the following exceptions:

  • Senior citizens are eligible for an extra payment of interest @ 0.50% per annum over the normal ROI for deposits below Rs. 2 crores
  • Staff/ ex-staff: The bank pays an interest rate @1% over the normal ROI to the ex-staff/staff of the bank.
  • Retired bank employees having age over 60 years are eligible for both the benefits listed above.

Payment of Interest:

  • As in the case of normal term deposit accounts, the interest shall be payable every quarter.
  • The bank accepts the deposit under MIP, RIRD, and QIP schemes also.
  • Interest earned in this scheme is liable to be taxed as per the government directives. The TDS (Tax Deducted at Source) applicable to the interest earned by the account holder is subject to be deducted by the bank as per the government guidelines.
  • As per the present guidelines, interest income of more than Rs. 40,000 per annum shall attract a levy of TDS.

Other Aspects of BOB Tax Savings Term Deposit

Here are a few other benefits of this Bank of Baroda Fixed Deposit Scheme:

  1. Prepayment: The term deposit under this scheme is open for a minimum period of 5 years. The bank under some circumstances may allow closure of the account before the maturity date but in such cases, the bank shall allow the rate of interest @ 1% lower than the applicable ROI on the date of opening the term deposit for the period of maintaining the term deposit account.
  2. Nomination: A nomination facility is allowed in this scheme.
  3. Auto-Renewal: The bank shall renew the term deposit under the Bank of Baroda Tax Savings Term Deposit scheme after the maturity date, under the normal term deposit scheme for a further period of 12 months.
  4. Account Transfer: The term deposit account opened in this scheme may be transferred to any other branch of the bank just like other accounts.
  5. Other Conditions: Rules applicable to general term deposits of the bank shall apply to the term deposit under the Bank of Baroda Tax Savings Term Deposit scheme, apart from those listed here.

    Deposits under the Bank of Baroda Tax Savings Term Deposit scheme are subject to Government guidelines circulated from time to time.

Bank of Baroda Tax Savings Term Deposit FAQs

Here are the frequently asked questions:

The account can be opened by the applicant by visiting any of the bank’s branches and submitting the required documents. If you already have a savings account in the bank, you are required to just fill a term deposit opening form which is easily available in the branches. In this case, no extra document is to be furnished by the applicant.

In case you are new to the bank, you will require opening a new savings account first by furnishing fresh KYC documents and recent passport-size photographs. The bank shall examine the documents along with the application form and a savings account shall be opened in your name. After the opening of the savings account, you may deposit the required amount in the account and proceed with the opening of a fresh term deposit under Bank of Baroda Tax Savings Term Deposit as detailed in the previous step.

The account can be opened in single as well as joint names. The joint accounts can be opened for a maximum of 2 individuals where the 2 individuals can either be adults or a combination of an adult and a minor. Tax benefits can be enjoyed by only the first holder of the account.

For single accounts only individuals and Karta of a Hindu Undivided Family are eligible.

There is no facility for premature account closure. Premature closure is only allowed when the account holder passes away. In this case, payment is done to the nominee of the account holder as per bank rules and guidelines.