In a Tax Saving FD, depositor gets tax benefits under Section 80C of the Income Tax Act. This means that you can claim deductions upto Rs 1.5 lakhs by investing in Tax Saving FD. Interest earnings in Tax Saving FDs are however, taxable. The lock-in period in Tax Saving FDs is 5 years. Regular FDs on the contrary, do not offer any tax benefits to depositors. They do not have a lock-in period