While the interest on bank savings in the name of your child is clubbed with your income, Rs1,500 interest per child is exempted from tax. This is allowed for a maximum of two children. It means you could have opened two FDs of Rs16,650; one per child. The interest @9%pa would have been tax-free for you. Rs3,000 interest from a couple of children’s bank account exempted from your taxes will mean almost Rs1,000 saved (if you are in 30% tax bracket).