Tax saving FD

[jedy]

Hi,

I am 34 years old and my CTC is 7lakhs and my wife is 31 years old and her CTC is 5 lakhs. For this financial year we have not made any investment for tax saving, since we were planning to purchase a house. But it got postponed to next year. For tax saving, I am planning to invest 50k + 50k in 5 years tax saving bank FD in city union bank which offers 9.50% pa. This investment is purely for creating the retirement corpus.
Please suggest me whether this is a good idea considering the interest rate offered even though return is taxable. Or any option other than PPF,NSC and ELSS. Please suggest me....

Jedy

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[Expert]

If you are creating a retirement corpus than I would go for ELSS. Because you can review it after 3 years and move to other ELSS or other investments, if not performing and more chances that it will give you more return than other instrument suggested by you -
ELSS - Lock in for 3 years.
PPF - Lock in for 15 years.
NSC - Lock for six years.But all interest income is taxable at the respective slab rate of the individual.
Bank FD - Lock in for 5 years. Taxable

Note - The above instruments you can use for risk diversification.