Liquid Funds – Best Liquid Funds to Invest in 2019

Posted by Mehul Kothari | Published on 20 Jun 2019
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Liquid Funds – Best Liquid Funds to Invest in 2019

‘Are mutual funds meant only for long term equity investing? Or Where should I invest my money for secure and steady returns?’

These are a few questions that many investors seek answers to. A quick search online for the right fund to invest can make things a bit worse. The presence of numerous categories and funds to choose from can be overwhelming for new investors or sometimes even the seasoned ones. So where should you invest for the short haul?


Have you heard about Investing in Liquid Funds? What are they?

Liquid funds are open-ended mutual fund schemes that invest in debt market instruments with maturities up to 90 days. Liquid funds are usually associated with lower risks and thus deliver relatively safer returns. Liquid funds primarily invest in instruments such as Treasury bills, commercial papers, government securities and so on.

Liquid funds India has a slightly different NAV calculation structure when compared with other mutual funds. The NAV or the net asset value of liquid funds is calculated for 365 days at the same time. Unlike other debt funds where the NAV is calculated at the end of a business day. There is no lock-in period in liquid funds.

As is the case with any other mutual funds, you can place a request to redeem NAVs of liquid funds at any point in time. The order to redeem the units will be placed by 2 pm on the current day or the next business day if you miss the time slot. In such cases, the NAV for the previous business day would be considered.


Why you should invest in liquid funds?

Liquid funds have one of the lowest risks associated as compared to other mutual fund schemes. This makes them ideal for investors who are not willing to take a lot of risks on their investments. And unlike some other funds, liquid funds do not have any exit loads.

Even if you invest in the best liquid funds, you may not receive returns like the equity mutual funds. Instead, you will receive a steady stream of income without taking many risks. Liquid funds are ideal for individuals who have some spare cash and are looking for a way to park it.

Redemption of mutual fund NAVs usually takes 24 hours to process. If you were to place an order to redeem your units, the earliest it would be done is the next business day.

The best performing liquid funds can offer returns anywhere between 6% - 8%, which is much higher than the standard interest rates that banks offer. The low-risk factor along with comparatively handsome returns is what makes liquid funds an interesting proposition.


Liquid funds in India

As an investor, you must carry out your due diligence before investing in any mutual fund for that matter. The following are some of the parameters that you must consider before investing in liquid funds.

- Fund Objectives
Most of the instruments that are a part of liquid funds mature within 60 to 90 days. This ensures that there isn’t much fluctuation when it comes to the NAVs. This also prevents major variations in the NAVs. If a rating agency down rates a company, the NAV of even the best liquid funds can take a beating. Though they are not risk-averse, when compared to other mutual funds, you can rely on their stability.

- Potential returns
Knowing the kind of returns that you can expect will help you decide with more conviction whether you want to invest in liquid funds India or not. When you consider historic data, liquid funds are known to return between 6% - 8% annually. Now if you look at the interest rates on offer by banks (on an average 4% annually) the liquid funds perform quite well. Though one cannot guarantee returns in mutual funds, in most cases you will be able to redeem your units in the green.


How should one evaluate liquid funds?

It should not come as a surprise that you would need to do some background work to get your hands on the best performing liquid funds. The following parameters should help you zero down on the top performing liquid funds.

- Fund expense ratio
Mutual funds also require administrative work to be completed in the background. Asset management companies usually charge them via expense ratios. In other words, it shows the operating efficiency of a fund. A lower expense ratio ensures that you will walk away with a higher return percentage.

- Returns of the fund
It must be noted that the past performance of even the top performing liquid funds is in no way an indication of the future returns. However, looking into history will help you better assess a fund. 


Top 8 Liquid funds for 2019

The following is a list of the best liquid funds to invest in 2019. Here is a glimpse of the funds and their details briefly.

Blog Top Liquid Funds 2019


The above list contains some of the best liquid funds 2019 has on offer. You can consider the above funds and take a final call on which fund suits your investment profile.


Conclusion

There are a few strong reasons why liquid funds have garnered so much interest in recent years and a place in the portfolio of various investors. Their shorter maturity dates ensure that fund managers are not in a constant tussle to manage redemptions.

If you are considering parking your money for a short period, then just take a pick from the best liquid funds. It would offer you stable returns while allowing you to forget about the fund, until any short-term goal demands your attention. The low risk and steady returns make liquid funds, an ideal investment for short to mid-term goals.

Investors who have been in the habit of investing in fixed deposits and savings accounts will find the best liquid funds an interesting option to invest in. If you were to receive any dividends on these funds, you need not worry about taxes, since they are tax-free in your hands.

To sum up, if you are someone who wants to make their money work hard, then you should definitely not let go of the Liquid Fund option. Our team at IndiaNivesh constantly encourages customers to take advantage of this instrument. Our expert yet friendly team can hand-hold you to getting started and suggest you the best liquid funds to consider.




Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.

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Difference between Equity shares and Preference shares

Posted by Mehul Kothari | Published on 19 Jun 2019

The financial world consists of both the debt market as well as the equity market and every corporate needs to raise capital by issuing shares, which could be in the form of equity shares, preference shares, etc. However, the prime reason for one to invest in the volatile share market over its debt counterparts is the sheer joy of overperformance.So, when you consider long-term investment, equity investments turn out to be one of the most profitable ones. Sure, there is the risk of prices going high enough to bring an ear-to-ear smile and low enough to make you regret your decisions at times. But over a considerable period, you could walk away with good returns.When we discuss shares, there are two types of shares that one can choose between, equity shares and preference shares. But before you can start investing, the most obvious question to ask would be what are equity shares and preference shares.The DefinitionEquity shares and preference shares are quite similar, yet different in the way they function and offer you returns. When you own equity shares of a company, the dividends are subject to how the company is performing. And at times, you might not even receive any dividends. This is one major difference between equity shares and preference shares. With preference shares, the company is bound to pay you dividends, since the amount is fixed but not with equity shares. - Equity SharesWhen you hear the word shares, people almost always refer to equity shares or ordinary shares. With equity shares, a company offers you partial ownership and thus, involves a lot of business risk. The members, who own equity shares, also acquire the right to vote for critical decisions in the company. These decisions may include electing a new leader, acquisition, merger, etc. And they play a crucial role in raising capital for the company. Equity capital forms the basic foundation of the company and its creditworthiness. The dividends or payouts to equity shareholders predominantly depend on the earnings of the company. Once the company has settled all other claims and expenses, it will pay its equity shareholders.- Preference SharesBetween equity shares and preference shares, it is the latter that offers a certain source of income. With preference shares, a company promises its shareholders a fixed amount as dividend. And the preference shares take precedence over ordinary shares or equity shares.They also have an edge over equity shareholders when it comes to repaying of capital. Since the rate of dividends is fixed, it is usually compared with debentures. Salient Differences between equity shares and preference sharesNow that we are aware of the definition of equity shares and preference shares, we can delve into the major differences. Here are some of the key differences when it comes down to equity shares vs preference shares.- Preference shares have specific rights over ordinary shares or equity shares of a company. - Preference shareholders do not have any rights when it comes to voting, whereas equity shareholders do. However, under a few circumstances, preference shareholders can gain the right to vote. For instance, if there hasn’t been dividend payment in over two years. - Preference shareholders do not reserve any claims to bonus shares, while one of the biggest merits of equity shares includes them having access to bonuses. - Preference shareholders have the right to receive dividends, but equity shareholders do not have any such rights. A dividend is paid out only if the company makes a profit to distribute. - Also, in a given year, if a dividend is not paid out to preference shareholders, the same would be accumulated and needs to be paid out later. However, the same is not true for equity shareholders. If a dividend is not declared for equity shareholders, the same does not accrue. - One of the limitations of preference shares is that shareholders do not have any claims in the management of the company, whereas equity shareholders do. - Preference shareholders can convert their shares to equity shares, but the reverse is not possible.Other than the salient differences, there is some outright difference between equity shares and preference shares which are worth mentioning. Here are some additional equity shares vs preference shares pointers that you should be aware of.- The basic descriptionOne crucial equity shares and preference shares’ difference is that equity shares are the foundation of a company, while preference shares give shareholders an edge over ordinary shares. It is offered to banks or large corporates when the company needs funds.It is one of the biggest merits of preference shares that a company receives funds whenever additional capital is required.- The rate of dividendThe dividend paying rates of equity shares and preference shares may differ a bit. While there isn’t any fixed rate for paying dividends to equity shareholders, preference shareholders do receive dividends at a fixed rate, which is predefined and can be a nominal value of the share price.The rate of dividend for equity shareholders is decided by the Board of Directors after evaluating the company’s performance in the previous financial year.- Issuance of sharesIt is mandatory to issue equity shares of a company to go public while issuing preference shares is not mandatory under the Company’s Act 2013.- TradingYou can easily trade equity shares in the capital market, whereas you cannot trade preference shares. This makes them less liquid as compared to equity shares. Thus, the preference shares do not see any price appreciation or depreciation as the equity shares do. Investors do have the option to sell back the preference shares to the company.- CategoriesAnother equity shares and preference shares difference come in the form of types. Since equity shares do not have any type, they are normally known as ordinary shares. On the other hand, the different types of Preference Shares include non-participatory or participatory, cumulative or non-cumulative, convertible or non-convertible and so on.- CostThe low cost of the equity shares makes them accessible by small investors. On the contrary, the higher price tags on the preference shares make them ideal for medium to large investors.- LiquidationIn the event of liquidation, the preference shareholders will have the first right to receive any kind of payment after the company’s creditors are paid. While equity shareholders have rights on the assets of the company once all the pending payments are complete. - RepaymentOne of the limitations of equity shares is that a company is not liable to repay the equity shares to its holders, whereas they must repay their preference shareholders.As discussed in the beginning, equity shares and preference shares are similar yet quite different. Equity shares and preference shares both allow you to own a piece of the company but in various other aspects. So, preference shares are a mix of equity shares and debentures.The crux of the story is that there are many choices available to invest. However, investing should be done after understanding the instruments and, as per your goals. At IndiaNivesh, we use extensive research to help you achieve your financial goals. Equity investing requires in-depth understanding, analysis, and periodic reviewing. Our team uses one of the best proprietary equity research to make your investment a fruitful one.     Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.

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Benefits of Mutual Funds Investment in India

Posted by Mehul Kothari | Published on 20 Jun 2019

Mutual funds have emerged as one of the most popular investment avenues for all kinds of investors. Its popularity can be understood from the fact that most of the investors now wish to participate in the equity market via mutual funds. In fact, the mutual fund returns over the past few years have outperformed most of the other investment avenues. Apart from the consistent returns, there are many other benefits of investing in mutual funds. In this article, we will walk you through the key benefits of mutual funds. What Are The Benefits Of Mutual Funds? • Professional ManagementMutual funds collect money from multiple investors and invest them across various asset classes with the help of professional management. The fund managers of the mutual fund companies are highly qualified and have years of experience in investing money. Another advantage of mutual funds is that the fund manager has a team of experts who extract information from every corner of the market. This kind of expertise generates faith and assurance among the investors that their money is in the safe hands. • DiversificationDiversification is always important to build a good portfolio. Mutual funds invest the funds collected from various investors in different investment avenues. By spreading the money across a wider spectrum, the risk levels decline considerably. The mutual fund unit holders do not have to depend on the growth of a particular sector or stock when the portfolio is diversified. Thus, diversification is another benefit of mutual funds. • Smaller Capital OutlayAnother advantage of mutual funds is that it requires smaller capital outlay. To build a diversified portfolio, a large investment is required in general. But in the case of mutual funds, the money from multiple investors is pooled together and invested in a diversified portfolio. Thus, an individual investor investing in the mutual fund gets the benefit of the diversified portfolio even with a smaller capital outlay. • Economies of ScaleMutual funds purchase and sell securities in large volumes. This makes the transaction cost much lower than what a normal retail investor would pay if he purchases or sells it through the stock broker. • Easy to InvestThe biggest benefit of mutual funds in India is that it is easy to invest in them. You can start investing in mutual funds once you know your investment objective. Investment in mutual funds can be made depending on the schemes that suit your need and time duration. There are many types of mutual funds in the market and you can invest easily in any of them. Moreover, after investing you are not required to pay any further charges. • Liquid in NatureOne of the benefits of mutual funds is that they are liquid in nature. The open-ended funds can be redeemed at any time. In liquid funds and debt funds, the redemption money is transferred into your bank account in T+1 days. In the case of equity funds, the redemption money is transferred into your bank account in maximum T+3 days. This makes mutual funds very popular because you have the funds available at your disposal whenever you need them. • Invest as Per Your NeedsThere are various types of mutual funds available in the market and you can invest in any of them based on your needs. Select the mutual fund that suits your risk appetite and financial goals. Various products of mutual funds have different advantages and you must analyse each one of them to select the best for yourself. Also, you can make an investment in the mutual fund of any amount you like by way of an SIP or lump sum. The amount of SIP can be as low as Rs. 500 per month. • Disciplined InvestingThe main benefit of investing in mutual funds is that it makes you a disciplined investor. With SIP in mutual funds, you invest in every phase of the market and avoid taking the wrong decisions during panic situations in the market. Systematic Investment Plans help the investors in achieving their long term financial goals successfully. If a disciplined investing approach is not followed then you might end up spending on things that do not hold much utility. In addition, SIP is the best way to cut expenses and eradicate emotions from the investment process. • Various Modes of Investment and WithdrawalAnother benefit of mutual funds is that there are various modes to invest and withdraw the money. Investment in mutual fund schemes can be made in a lump sum or Systematic Investment Plan, systematic transfer plan of transferring money from one mutual fund scheme to another, etc. There are also many ways to withdraw money from mutual funds like lump sum withdrawal, systematic withdrawal plans, etc. Therefore, the choices available to invest and withdraw money is a big benefit of investing in mutual funds in India. • Helps You Save TaxesOne of the benefits of mutual funds in India is that they help you save a considerable amount of tax. Equity-Linked Savings Schemes (ELSS) are diversified equity mutual funds that qualify for tax benefit up to Rs. 1.5 lakhs under Section 80C of the Income Tax Act. Moreover, long-term capital gains made below Rs. 1 lakh in a single financial year are also tax-exempt. The above mentioned are a few of the benefits of mutual funds. As a beginner or a seasoned investor, one must aim to invest in the mutual funds for the long term. Mutual funds have rewarded the long term investors handsomely. With the increasing popularity of mutual funds, expect many more types of mutual funds to hit the market. If you need any assistance for investing in the mutual fund market, you may contact IndiaNivesh Ltd. We suggest the right mutual fund for you after understanding your financial goals and tenure of investment.   Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.

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  • IPO Process - 5 Steps for Successful Listing in India
    Posted by Mehul Kothari | Published on 14 Jan 2020

    The last two years have proven to be very fruitful for the IPO (Initial Public Offer) market. Investors have cashed in the opportunity and made huge returns in the IPO. The journey of the company to offer its shares to the public is exciting and at the same time, it also offers an opportunity to the investors to reap the benefits of IPO. Seeing the performance of recent IPOs, the attention of investors towards it is at an all-time high and they are always on a lookout for the new opportunities to arrive. When a private company decides to go public, the initial public offering process starts. The companies go public to raise a huge amount of capital in the exchange of securities. An IPO is an important stage for the growth of any company because they have access to public capital which enhances their credibility and exposure. The initial public offering process in India is regulated by the ‘Securities and Exchange Board of India (SEBI). In this article, you will learn about 5 steps of the IPO process for a successful listing on the Indian stock exchange. IPO Process in India Step 1: Selection of an Investment Banker for Underwriting Process Before understanding the IPO process, let us understand what underwriting is. Underwriting is a process in which the shares of the companies are issued and sold during the initial public offering. During this process investment bank advices and gives suggestions to the company against a fee. The investment banker understands the financial situation of the company and accordingly suggests them plans to meet their financial needs. They sign an underwriting agreement with the company. The agreement has all the details about the deal and the amount that will be raised by issuing securities. The companies may select an investment bank after determining various factors such as the reputation of the bank, expertise in the process, quality of their equity research and experience in the sector they deal. All these factors help in selling the IPO to the investors, traders and retailers. Step 2: Due Diligence and Regulation Process After the selection of the investment banker, the company is required to make an initial registration statement as per the regulations of the SEBI. In this process, the company and the underwriters submit the SEBI its fiscal data and the future plans of the company. The company is also required to give the declaration about the usage of funds that will be raised from IPO procedure. This declaration ensures that the company has given each and every disclosure that an investor must know. The company must file various versions of the prospectus from the initial stage to the final stage with the investors. The prospectus consists of the company’s details like valuation of the company, risk and rewards of the investment along with other details. This IPO process ends with the filing of the above-mentioned documents. Step 3: Pricing The final price of the Initial Public Offering is determined by the investors. The investment bank markets the IPO. To attract the public to the IPO application process, they are priced at a discount. By issuing shares at discount, the share performs well when they are listed on the stock exchanges. The price of the stock during IPO procedure can be a fixed price with the price mentioned in the order document. On the other hand, a book building issue will have a price band within the bids that can be made by the investor. Step 4: Stock Listing and Price Stabilization When the shares of the company are listed on the stock exchange and trading begins, the investment bank takes measures to establish the price of the securities. When there are not enough buyers, the bank will purchase the shares. The role of the investment bank in stabilizing the share price is essential. However, one must remember that such buying would last only for a short period of time because the IPO process already consumes a huge amount of capital investment. Step 5: Transition to Market Competition When the company's transition period to the normal competitive environment is over, the company is required to make disclosures like its financial results, significant news, etc. that is material in nature and can affect the price of the shares. The role of the investment bank is still significant. It can continue as an advisor to the company and assist in increasing the price of the shares over a period of time.   Conclusion The above mentioned are the IPO process steps for a successful listing. An IPO can change the fortunes of the company and it can grow at a rapid pace. Apart from the company, investors can also reap the benefits of an IPO by investing in them. Since there are many risks and uncertainties associated with a company going public, good research before investment can be fruitful. The investors can compare the company with its peers and check its fundamentals before investing. An investor must also consider his risk appetite and availability of funds before investing money in the IPOs. If you are an investor and need any assistance regarding investing in the stock market, you can contact IndiaNivesh.Disclaimer: "Investment in securities market and Mutual Funds are subject to market risks, read all the related documents carefully before investing."

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  • IPO Allotment Status – All you need to know about IPO Allotment Process
    Posted by Mehul Kothari | Published on 14 Jan 2020

    Initial Public Offerings have been in existence for a long time. But recently they have come under a lot of limelight. In the July-September period of last year, funds to the tune of USD 0.86 billion were raised from just 10 IPOs. And as per an EY report, IPOs are expected to gain more momentum in 2020. IPOs or Initial Public Offer are the buzzwords these days. Especially after the successful ones like IRCTC and Ujjivan Bank. Indian stock exchanges (BSE & NSE) ranked 6th worldwide in the highest number of IPOs in Quarter 3 of 2019. Read on to understand the IPO Allotment process in detail. Important aspects of bidding in an IPO Before we move to the allotment, we should know some important basics about IPO bidding. These days, most IPOs take the book building route. Some important terms to be aware of: Price Band Each IPO involves a price band. It is a price range within which applicants can make their IPO bids. The upper limit (or maximum price) is s the cap price. The lower limit of the price band is the floor price. The final issues price (known as the cut-off price) is decided based on the bids received.   Lots The total shares (on offer in the IPO) are divided into small lots. Each applicant needs to bid in these lots and not for individual shares. For instance, if a company intends to issue 1 lakh shares and the lot size is 20 shares per lot. Hence, the total number of lots on offer is 5,000. As per the SEBI guidelines, applicants cannot bid for shares quantity which is lower than the lot size. Also, bidding for lots in decimals (such as 1.5 lots) is not permitted. It is important to note that the lot size is applicable only at the stage of IPO allotment. Post listing, investors can trade their shares in the market in whatever quantity they want. ASBA ASBA stands for Application Supported by Blocked Amount. This facility lets you bid in IPOs without paying any money upfront. The amount remains blocked in the bank account and is deducted only after the allotment. IPO Allotment process Share allotment in an IPO needs to be done as per the SEBI guidelines. With the changes introduced by the regulator in 2012, all RII (Retail Institutional Investors) applications need to be treated equally. Some important points about IPO Allotment process: Only bids which are equal to or higher than the issue price qualify for allotment. Retail applicants (with qualified bids) need to be allotted the minimum application size, subject to stock availability in the aggregate. Apart from retail investors, there are two other types of investors in an IPO – QIB (Qualified Institutional Buyers) and NII (Non-Institutional Investors). Allotment to them is done on a proportionate basis. Post submission of all the bids, a computerised application is used to eliminate all invalid bids. This helps to identify the number of successful bids. There can be two situations –Under subscription (number of applications received is lesser than the total lot of shares offered) and Oversubscription (number of applications received is higher than the total lot of shares on offer). Allotment Rules for over and under subscription In case of an under subscription, every investor gets full allotment, regardless of the application size. For retail investors, in case of an IPO oversubscription, the max number of retail applicants eligible for allotment of the minimum bid lot is determined by using this formula – Total no. of shares available for RII (Retail Individual Investors) divided by Minimum Bid Lot. If the IPO is oversubscribed by a huge margin, the final allotment is done through a computerised lottery method. This would mean that some applicants will not get any allotment. If the oversubscription is not by a huge margin, then all applicants will get the minimum bid lot and the balance is proportionality allotted to applicants who had bid for multiple lots.   IPO Allotment Status IPO Allotment Status of each applicant gives the details regarding the number of shares applied for and final allocation in the IPO. The IPO status details are available online on the website of the registrar. Each IPO has a specific registrar such as Karvy, Linkintime, etc. Applicants can check their IPO allotment status by providing details such as PAN, IPO application number, etc. IPO Allotment Status Online is available within one week of the IPO closing date. The entire allocation process takes almost 10 business days. In the case of non-allotment within that period, the amount paid by the applicant is refunded back. The registrar also publishes an allotment document which has all the details regarding the IPO allotment such as the total number of applications received, IPO allotment calculations, etc.   Why were shares not allotted to you in the IPO? There can be three reasons for this. Invalid Bid Bids in an IPO can be rejected or considered invalid for numerous reasons. Some of these are invalid Demat or PAN details, incomplete information, multiple applications by the same person, etc.   Over Subscription Oversubscription means that the demand for the company’s shares exceeds the number of shares issued. In case of a hugely oversubscribed IPO, the shares are allotted based on a lottery. The rationale being that every applicant has an equal chance. If your name does not come up in the lucky draw, you will not be allotted the shares.   Bid Price is below the issue price IPOs following the book building route requires applicants to bid for lots as well as the price they are willing to pay. If the bid price you have submitted is less than the final issue price, you will not get any IPO allotments.   If you want to stay on top of the IPO game, a financial expert can be of great help. A partner like IndiaNivesh, who has more than 11 years of experience in the Indian markets, can keep you informed about all the upcoming IPOs and help you make the most of it.  Disclaimer: "Investment in securities market and Mutual Funds are subject to market risks, read all the related documents carefully before investing."

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  • Tax Saving FD – Know About Tax Saving Fixed Deposit
    Posted by Mehul Kothari | Published on 14 Jan 2020

    Every salaried individual as well as a business person is required to pay taxes as per the income tax laws. While paying taxes, we all aim to legally save it in some way or the other. But how do we do that? It is the most confusing question for most of the taxpayers. One of the excellent ways of saving taxes is by investing in tax-saving investment schemes. They not only help you save taxes but are also instrumental in effectively achieving your financial goals. There are many investment avenues available in the market that either offer tax exemption or tax deduction. Having said that, selecting the most suitable and right tax-saving investments may not come easy for everyone. While choosing the right scheme, one needs to access several factors such as safety, returns and liquidity, among other things. A very popular tax-saving investment option among taxpayers is investments under section 80C. As per section 80C of the Income Tax Act, 1961, investments of up to Rs. 1.5 lakhs can be claimed as a deduction. Tax saving fixed deposit is a type of fixed deposit where you can get a deduction of maximum Rs. 1.5 lakhs under section 80C. To arrive at the net taxable income, the amount invested in tax saving FD is to be deducted from gross total income. Let us learn about some of the important points that you must consider before investing in tax saving FD. Things to Know About Tax Saving Fixed Deposit Investment in tax saving FD can be done by individuals and Hindu Undivided Family (HUF) only. The minimum amount for fixed deposits varies from bank to bank. Income tax saving FD has a lock-in period of 5 years. You cannot make premature withdrawals and loans against these FDs. Investment in these FDs can be made only through private or public sector banks. Rural and co-operative banks are not eligible for these FDs. Tax-saving fixed deposits can be held in ‘singly' or 'jointly'. When the holding is in joint mode, the tax benefit is available to the first holder. Tax saving FD interest rates vary from bank to bank. The interest rate ranges from 5.5% – 7.75%. However, note that some banks offer higher rates on FDs to the senior citizens. These fixed deposits have nomination facilities. The interest earned on the income tax saving FD is taxable according to the investor’s tax bracket. The interest on tax saving FD is payable on a monthly or quarterly basis. The main advantage of investing in tax saving fixed deposits is that they are less risky in comparison to equities. Since many banks offer this type of FD, let us learn about its details. Banks and Income Tax Saving FDs SBI Tax Saving FD Tax saving FD interest rates of SBI is 6.25% for general customers and 6.75% for senior citizens. The maximum deposit in a year is Rs. 1 lakh and the minimum deposit is Rs. 1,000. By using a tax saving FD calculator you can know the amount receivable after the lock-in period of 5 years depending on the maturity period of your FD.   HDFC Bank Tax Saving FD Tax saving FD in the HDFC Bank can be opened with a minimum amount of Rs. 100. The maturity period of this FD is 10 years. Tax saving FD interest rates is 6.30%. Senior citizens get an added benefit of 50 basis points over general customers.   ICICI Bank Tax Saving FD The interest rate on tax saving fixed deposits at the ICICI Bank to the general customers is 6.6% and for senior citizens, the interest rate is 7.10%. These rates are applicable to FDs having a maturity period of 5 to 10 years. The maximum amount that can be deposited is Rs. 1.5 lakhs and the minimum amount for opening tax saving FD at the ICICI Bank is Rs. 10,000.   PNB Tax Saving FD Punjab National Bank offers an interest rate of 6.30% on a five-year tax saving FD. The minimum amount for opening tax saving FD at the PNB Bank is Rs. 5,000.   Bank of Baroda Tax Saving FD Bank of Baroda offers an interest rate of 6.30% on a five-year tax saving FD.   The Bottom Line The above mentioned are the basic details about the major banks that offer income tax saving FDs. You may access each individual option carefully and select the suitable one after doing good research. You can find all the basic information on the bank’s website. If you want to find out the returns that you will be earning from the fixed deposit, you can access the tax saving FD calculator and find out the returns by entering your fixed deposit details. If you want to learn more about income tax saving FD or want to learn about other investment options, you can contact IndiaNivesh. We are among one of the most trusted and value-enhancing financial groups in India.Disclaimer: "Investment in securities market and Mutual Funds are subject to market risks, read all the related documents carefully before investing."

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