Fixed deposit accounts with a lock-in period of five or 10 years are eligible for deduction in income tax under Section 80C of the Income Tax Act.

Fixed deposits or FDs are secure financial instruments offered by public, private sector banks, small finance banks, non-banking financial companies (NBFCs) and post offices, which fetch guaranteed returns. In a Fixed deposit account, money can be invested for a higher rate of interest than savings accounts.Fixed deposit interest rates are subject to change from time to time. The interest rates vary according to the tenor of Fixed deposit   accounts with a lock-in period of five or 10 years are eligible for deduction in income tax under Section 80C of the Income Tax Act.

 

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