Income earned from your Savings Account is taxable. However, you can avail deduction of up to Rs. 10,000 on the total Savings Account interest income earned.
You can consider putting your money in a Fixed Deposit. This will definitely earn you more than a savings account and is a very safe way of growing your money. You can choose the tenure based on when you will need the money. If you are willing to take on a little risk, you can consider Debt Mutual Funds. These will earn you a little more than Fixed Deposits and are more liquid than Fixed Deposits. Most Debt Mutual Funds do not have any entry or exit loads. It is best to check for these before you decide to invest. The best part is that Debt Mutual Funds allow you to withdraw your money at any time unlike a Fixed Deposit where there might be penalties for foreclosure.
Want to check out Fixed Deposit rates? Click here. Or if you are looking for a Mutual Fund, click here.