5 Year FD(Time Deposit) Amount you can invest: There is no limit to the amount you can invest in the FD’s. However, interest earned on FD is taxable. Returns: The returns under FD’s varies from 7% to 7.7% depending upon the banks. Lock in period: if you want to get the tax exemption benefit under section 80C, then the minimum lock in period of Bank FD’s should be of 5 years. Premature withdrawal from FD’s are allowed. However withdrawal charges are applicable according to the bank you have selected. Tax benefits: Here also you get the benefit of tax exemption under section 80C. Interest earned through your FD’s is added to your income and is considered as taxable, if the amount exceeds the limit of Rs. 50,000 p.a. (section 80TTB for senior citizens) Expert’s Advice: Make sure you invest in 5 year FD so that you can claim benefit of same under section 80C, other FD’s are not eligible for the deduction.